Jonathan Pearson, director of Residentially, asks if the Government is doing enough to meet its 1.5 million new homes target.
There was a palpable sense of optimism across the affordable housing sector when the new Government came to power last year. For the first time in ages, it felt like we were on the verge of meaningful change.
Labour’s goal of building 1.5 million new homes by the end of this parliament, and its championing of affordable housing, was welcomed by those of us who have long believed that housebuilding should be a priority. The demand has never been clearer or more urgent, with National Housing Federation figures showing that more than 1.2 million households are now on social housing waiting lists in England and one in five children live in overcrowded homes.
This proves how critical it is to get housing policies right and to get them right soon. Yet studies suggest the Government could miss its housing target by hundreds of thousands of homes. The Centre for Cities has found housebuilding may fall 388,000 homes short by 2029, even if private development rises to its highest historical level. The shortfall could be as large as half a million according to research by the National Housing Federation, the Home Builders Federation, and Savills, almost a third of the target.
Partly this is because private developers alone cannot deliver the volume of housing needed. Their resources are squeezed, and a challenging economic climate makes it riskier for them to build at scale. That leaves housing associations and local authorities as the key players in meeting Labour’s housing targets. But they too will require significant Government support if they are to scale up their housebuilding efforts in time.
The New Economics Foundation has estimated that in order to reach the Government’s goals, the country needs to build at least 10 times more social homes per year by 2028 than the 9,500 it achieved last year. If Labour truly wants to meet its 1.5 million homes target, we need to see serious investment and bold reforms.
For a start, planning reform is desperately needed. Many local authorities lack enough staff to process applications efficiently, so need more support to hire and train enough planning officers to expedite approvals. The new funding we have been promised for 300 more officers is going to be an important first step to addressing this shortage, but I fear that it alone can do little to address many years of chronic underinvestment.
Another area needed is more support for first-time buyers. The removal of the Help to Buy scheme in England has meant it’s never been harder to get onto the property ladder and the Government’s First Homes initiative has been met with broad dissatisfaction by developers and housing associations alike. Meanwhile Right to Buy can no longer be allowed to continue to undermine development efforts and the Shared Ownership scheme needs reforming to prevent tying up vital capital that could be used to build new homes.
Above all, the Government must recognise that it is extremely difficult to plan multi-year developments and to make the financial commitments to scale up housebuilding without funding guarantees. Housing associations and local authorities stand ready to scale up their housebuilding efforts, but they need to know how much money is available and how it will be allocated, and the Government’s long-awaited Spending Review has already been pushed back from March into June.
The enthusiasm felt when this Government took office has not yet disappeared. Many in the sector still applaud its ambition and the promise of far-reaching planning reforms. However, there is now a collective sense of ‘wait and see.’ Can the Government provide the bold, decisive funding and policies that will translate its targets into reality?
