Diane Abbott has argued that increasing the supply of London housing will not bring down house prices in the capital because the market has become entirely dysfunctional.
This is in direct contradiction to Labour’s newly published housing policy review which highlights house building as a solution to “the biggest housing crisis in a generation”.
The MP for Hackney North and Stoke Newington was invited by housing campaigners Positive Money and Hackney Digs to offer solutions to Hackney’s high rents and shortage of affordable housing at a public debate held at Chat’s Palace Arts Centre on Sunday night.
Abbott compared London to Paris, where ‘waves of gentrification’ have pushed the traditional middle and upper middle classes further out of the centre, allowing only the ‘super wealthy’ to live there, while the poorer people are forced to ‘live out on the edge.’ The result of similar changes in London is that the cost of a family home in Hackney is now approaching £1million.
She said: “Increasing supply of houses alone will not bring down prices because there is an infinite supply of super-wealthy people willing to buy high- priced property at any cost. Pressure from international, non- domicile buyers is one of the reasons why London is not a functional market.”
The main solution offered by Abbott was that the housing market should be regulated. She argued that the market is susceptible to some government interference so that rents could be stabilised and councils would be free to ‘borrow and build’ more affordable council housing.
“There are some things which you just can’t leave to the market, and housing is one of them. That is why no great European city, or New York and San Francisco, don’t leave housing just to the market. We have to understand that just like health, just like education, it’s just too important that the state doesn’t have a role.”