The government will miss its 1.5 million housebuilding target by a massive margin, according to a new study.
The Centre for Cities think tank looked at housebuilding data going back to 1947. They found that even if private housebuilders match their best ever year for the next five, the government will still miss its housebuilding target by 388,000 – unless planning reform goes a lot further than the current proposals.
Could reforms close the gap?
The Centre for Cities recommends further-reaching planning reforms, including some blanket per-zone permissions – setting building standards for an area and then presumptively allowing any development that meets those standards instead of giving permission case by case.
Meanwhile, the government plans to allow local planning officers to sign off development without council committees getting involved, as long as they meet national standards and local plans.
But the majority of councils say their housebuilding targets are unrealistic. Some have been asked to build several times their previous annual target. Construction industry bodies have also warned that they don’t have enough staff to build the numbers that the government wants.
Any reforms would have to make a massive difference if Labour is to hit their target. Far from equalling the highest ever year of housebuilding, the housebuilding sector is having a slow year. Builders started 31,660 homes in Q2 2024, down 60.3% on the same quarter in 2023.
That’s partly because more homes were started in Q3 of last year to get ahead of new building standards. But even so, just 231,300 homes were completed in 2023 – 9% lower than in 2022. If housebuilders matched that performance every year, the housing target would be missed by 345,000. And November stats from S&P Global show that housebuilding has remained low throughout the year despite an increase in other construction activity.
Housebuilding shortfall to affect affordability
Missing the housing target is likely to drive further price growth and make housing less affordable.
The latest Housing Purchase Affordability report from the Office for National Statistics (ONS) found that the average home in England cost 8.6 years of average household income in 2023, compared to 5.8 in Wales, 5.6 in Scotland and 5.0 in Northern Ireland. Their threshold for unaffordability is a cost of more than 5 years of income, meaning that housing is unaffordable for most people everywhere except Northern Ireland. In England, only the top 10% of households earn enough to afford the average home.
According to the ONS, prices in England have risen twice as fast as incomes since their data began in 1999, although affordability has improved slightly since 2020. Affordability in Scotland and Wales has also fallen since first measurement.
Other housebuilding headlines
Labour will miss its housebuilding pledge… says official leading the plan – I
Angela Rayner says newts can’t be protected more than people who need housing – Sky News
£3 billion boost for UK housebuilding: Unlocking homes and driving growth – Building Design & Construction
