Ahead of the 2024 general election, Labour announced that it would build 1.5 million new homes. What could this month’s Budget do to help them reach that target?
Earlier this month, the prime minister said that the Budget would put “rocket boosters” under housebuilding by streamlining the planning process for homes built on brownfield land – formerly developed areas such as disused factories.
Their system of planning passports would further make approval near-automatic for dense housing blocks in cities, as long as they met design and quality requirements. And the government has also talked about opening up some greenbelt land to development.
What do the experts say?
Failing to build enough housing is a long-term problem in the UK. No government has ever delivered the 300,000 net new homes in a year that Labour needs. And with only 150,000 homes projected to be added in 2023-24, as many as 450,000 homes could be needed annually by 2029 to hit the target.
Fast-tracking planning should help, according to a recent report on housebuilding by the Institute for Government think tank. Having found that the planning system in England is one of the biggest barriers to housebuilding, they say the government must be ready to override local objections to new development.
The group also s that housing plans should be aligned with local and national infrastructure plans, and stress the need for more capacity in the planning system and housebuilding industry.
Aligning local and national housing policy is also the theme of a new report by the Yorkshire Building Society. YBS wants the government to appoint a Housing Tsar to keep housebuilding at the top of the national agenda. In addition, they’re calling for more immediate help for first-time buyers, including a revived Help to Buy scheme that covers existing properties as well as new-builds.
Money could be a sticking point
Changing planning rules won’t necessarily be enough. New houses and infrastructure will need a lot more new cash to be injected into the economy. The bill for infrastructure alone is expected to be £1.4 trillion by 2040, according to the Civil Engineering Contractors Association. And a further report estimates that the government will miss its 1.5m housing target by around 475,000 unless more money is unlocked for social housing grants.
This may require the government to rewrite fiscal rules that limit their borrowing. There is speculation that Chancellor Rachel Reeves could change the definition of government debt so as not to include some long-term infrastructure spending. Politicians argue that this kind of spending could promote growth, ultimately making it good for the public finances – but the government hasn’t yet committed to this.
Other housebuilding headlines
‘Perfect storm’ blocking thousands of desperately needed social homes – BBC
UK housebuilders to be given deadline to fix dangerous cladding – Financial Times
New home planning approvals in England fall to lowest level in a decade – The Guardian
