Somewhere to call home

One Labour policy has gone under the radar – it could be transformational View in browser Jeevan Vasagar • Monday 14 July 2025 Dear friend, Welcome to today's Sensemaker. Long stories short An Israeli airstrike killed several children collecting water in Gaza. The Met Office said extreme heat is becoming the new normal for the UK. Ana Maria Gonçalves became the first black woman in Brazil's literary academy. Somewhere to call home At the start of this month the government pledged billions to build 180,000 homes at "social rent" set at around half the market rate. So what? Labour isn't short of bad news, so it is surprising to find a policy announcement that could be transformational and has been barely discussed outside the sector. Building social and affordable housing doesn't just stimulate the economy directly, it is helpful for business: creating housing for workers so companies can expand; the NHS: damp, cold and mouldy homes are bad for people's health; and education: social housing takes families out of temporary accommodation. Backdrop. In the late 1960s, more people rented from councils and housing associations than private landlords. Right to Buy transformed that by selling off council houses. As local authorities couldn't reinvest the proceeds in building new homes, social housing dwindled. Reinvention of the slum. The result is that the private rental sector boomed, but with homes of poorer quality than those provided by councils or housing associations. These are more likely to fail the Decent Homes Standard, a measure of whether a house is safe, warm and in good repair. Ironically, while Margaret Thatcher's policy was meant to encourage home ownership, many council houses sold under Right to Buy are now rented out in the private sector in far worse condition. But a string of recent announcements spell more money and more certainty for the social housing sector, including a £39 billion investment in social and affordable homes over the next decade ('affordable' rents are usually defined as 80 per cent of the private rate); allowing social rents to increase above inflation every year for a decade; and exempting newly built social and affordable housing in England from Right to Buy for 35 years (Scotland and Wales have already abolished the scheme). Of the moment. Labour also plans a programme of new towns, each with at least 10,000 new homes. This ought to be a triumph at a time when the frontrunner for New York City mayor has built a campaign around affordability that has resonated with younger voters in the UK. Wedge issue. Social housing also divides the Conservatives, with many Tory MPs needing to soothe Nimby voters, and others worried about how they might appeal to young renters. But there are three reasons why the news hasn't cut through. Labour: the party may be scared to shout about it. In their last manifesto, the Tories proposed a 'local connection' test for social housing. Roughly 90 per cent of social housing tenants are British citizens but an attack doesn't need to be accurate to land. Voters: for most Brits housing ranks much lower than the economy, immigration and health. It's a bit different in London, where 30 per cent see it as an important issue. Caution: despite the ambition and the funding, building a lot of new houses is like turning a supertanker around, and the waters are not particularly favourable at present. The government has set a target of 40 per cent of homes in its new towns to be affordable. For the numbers to work, the other 60 per cent need to be sold at a profit. But since the pandemic, construction costs have spiked. And the housing market, especially in London, looks stagnant. Broader shifts. The British usually think of themselves as a nation of homeowners, but owner occupation has declined since 2005. Related is the fact that since the financial crisis, mortgage lending has become tighter. Richard Donnell from Zoopla said: "Risk aversion and mortgage regulation has seen lenders focus on households with higher income and greater equity." What's more… The average household income of first time buyers is now £73,000. It's an increasingly elite group of people who can afford to own the roof over their heads. A new generation of social housing has rarely looked more essential. Chart of the Week Postcard from SW19 Jannik Sinner held his arms aloft and froze, a momentary monument to himself, to his brutal mastery, to ruthlessness and resilience and recovery. Never one for wanton displays of emotion, the Italian 23-year-old settled for accepting Centre Court's febrile adoration: know me, respect me, love me, for I am your god. Read George Simms' dispatch from the final day of Wimbledon. The Nibs Capital Economy, business and finance Hard times The British economy shrank again in May as Labour's ability to stick to its fiscal plans without raising taxes recedes from view. The 0.1 per cent contraction was driven by falls in manufacturing and construction, as well as a poor month for retail sales. It marks another lugubrious few days for Rachel Reeves, whose long-term challenges were laid out earlier in the week by the OBR report on fiscal risks. The dangers to the UK public finances, it warns, are "daunting" with high debt reducing the economy's capacity to respond to future shocks (of which there have been a few). Alongside other worrying signals, this raises the question about whether the 0.1 per cent growth forecast would have made much of a difference. The FT's Robert Shrimsley points out that Britain has a parlous economy and a political class scared to admit to voters that tax rises will be necessary. A bad combination if you're the chancellor. Technology AI, science and new things Interstellar interloper There have only been three objects detected from beyond our solar system. The third, scientists said on Friday, could be the oldest comet ever seen. A telescope in remote Chile spotted 3I/Atlas earlier this month when it was roughly 670 million kilometres from the Sun. Its trajectory suggests it may have come from the Milky Way's ancient 'thick disc' – Earth is in the thin disc – which makes it likelier than not that it is billions of years older than the solar system. Its two interstellar predecessors are 1I/'Oumuamua, seen in 2017, and 2I/Borisov, seen in 2019. There's no coincidence in the recency of these discoveries as telescopes become more advanced. It's expected that the Vera C Rubin Observatory, which begins its survey of the skies later this year, could discover up to 50 new objects from beyond the solar system. The 100-year life Health, education and government Plane expensive Heathrow airport's £10 billion improvement plans are immediately raising eyebrows. Third runway aside, Heathrow wants to demolish a dormant terminal, redesign another, overhaul its entire car park network, build new road tunnels and redevelop the complex unseen system that handles bags, vehicles and cargo. This comes at a price. City AM reports that the car park alone could cost more than Gatwick's expansion plan. The taxpayer isn't funding it, but Labour's approve-everything attitude towards infrastructure projects may help it get through planning. The development is expected to be privately funded, in part by a rise in airport charges. These are paid per flight by airlines, usually by passing on the cost to the passenger. Heathrow's charges are already the most expensive in the world, but overhauling the fourth busiest airport in the world to handle 10 million more passengers a year is no small feat. Our planet Climate and geopolitics Money talks   Trump said he would resume weapon supplies to Ukraine by selling Patriot missile interceptors to Nato, which will pass them on to Kyiv. The move seems designed to satisfy allies who oppose support for Ukraine, as Trump can say that he has avoided directly arming the country and made some money in the process. The reality is more complicated. Nato is funded through the contributions of its members, the most generous of which is America, which raises the possibility that the US will help reimburse its own weapons. Many people will also judge that Trump is arming Ukraine for all intents and purposes, with the role of Nato as a go-between little more than a technical flourish. It does seem, for now, that the president is edging closer to Biden's stance on Ukraine, which was to provide support with a large dollop of caution. Trump said he would probably make a "major announcement" about Russia today. Culture Society, identity and belonging Unnecessary outbreak A child has died in Liverpool after contracting measles, the second to have done so in the past five years. The Sunday Times reported that the child had other serious health problems, and it isn't known if they were vaccinated, but the death comes as Liverpool deals with an outbreak of the highly contagious disease. Seventeen people have been treated at Liverpool's Alder Hey Children's Hospital for measles since June. The city has a childhood MMR vaccination rate of less than 73 per cent, 11 percentage points lower than the rest of England and significantly short of the 95 per cent needed for herd immunity. This is not just a UK problem: the US has posted its highest number of annual measles cases in 33 years. The Week Ahead UK 14/7 – Pat McFadden at joint committee session on National Security Strategy. 15/7 – Chancellor Rachel Reeves delivers Mansion House speech; sentencing for two men found guilty over Sycamore Gap tree felling. 16/7 – ONS releases monthly inflation indices. 17/7 – German chancellor Friedrich Merz visits UK. 18/7 – Four to appear in court charged with terror offences over RAF Brize Norton vandalism. World 14/7 – EU trade ministers to meet in Brussels to discuss relations with US. 15/7 – WHO and Unicef release national estimates for child immunisation coverage; 16/7 – International Aids Society conference in Rwanda; sentencing for woman guilty over plot to sell Graceland, former home of Elvis. 17/7 – G20 finance ministers and central bank governors meet in South Africa; Taiwan Semiconductor Manufacturing Company releases quarterly results. 18/7 – Wu-Tang Clan perform last show of final tour in Philadelphia. Thanks for reading. Please tell your friends to sign up and tell us what you think. Jeevan Vasagar jeevan.vasagar@observer.co.uk Additional reporting by Xavier Greenwood, Brad Gray and Nina Kuryata. Edited by Xavier Greenwood.     More from The Observer Listen The Salt Path Controversy: Behind the scenes The Observer recently published a major investigation into the bestselling memoir The Salt Path. 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