Chancellor: House building is the foundation for economic growth

The Chancellor of the Exchequer, Rachel Reeves, has used her first speech to talk about house-building as the foundation for economic growth.

The Rt. Hon. Rachel Reeves made her first speech as Chancellor of the Exchequer today, 8 July 2024, emphasising three key policy pillars of stability, investment, and reform.

Watched from the front row by Housing Minister Matthew Pennycook and Secretary of State for Energy Security and Net Zero Ed Miliband, she began to elaborate on Labour’s manifesto commitments on planning by announcing an immediate review of the National Planning Policy Framework (NPPF), a task force to unblock stalled developments, and making clear that Ministers will take an interventionist approach to get Britain building.

Despite asserting that the incoming UK Government has inherited the worst economic circumstances since World War Two, and being clear that hard choices will have to be made, Reeves set a proactive tone as she spoke from the Treasury on her fourth day in office.

The Chancellor was keen to emphasise that she has hit the ground running, claiming to have done more on planning reform in 72 hours than the previous administration did in 14 years.

Immediate action on planning:

A review of the NPPF will be completed before the end of July 2024, with a loosening of red tape that has held back construction, infrastructure, and the energy grid, as part of broader plans to encourage billions of pounds of private investment into housebuilding.

As part of this, The Rt. Hon. Angela Rayner, Secretary of State for Levelling Up, Housing and Communities, will write to local planning authorities, setting expectations for universal coverage of plans and swift reviews of green belt boundaries.

Councils will be required identify brown and grey belt development sites commit to supplying local planning teams, and Reeves reiterated the commitment to supply 300 new planning officers across the country to resource this activity.

Further announcements on mandatory house building targets and energy efficiency standards are expected soon from Angela Rayner and Ed Miliband respectively.

Homes are a national priority:

A new task force will initially focus on stalled developments in Liverpool Central Docks, Worcester Parkway, Northstowe (Cambridgeshire), and Langley Sutton Coldfield. Reeves stated that completing these projects would deliver more than 14,000 homes.

Both the Chancellor and the Secretary of State will actively monitor major planning decisions and are determined to use their powers to intervene where they believe development brings benefits locally and nationally.

The UK Government will take an infrastructure-first approach, saying some trade-offs with local community or environmental concerns will be necessary, but that providing adequate housing is a primary national issue. Whilst local people and authorities will be given a say over where homes are built, they will not be able to challenge the fact that the homes are needed.

Homes of all types will be built:

Questioned by reporters, Reeves stated it will be made clear to developers that new developments must contain a mix of housing tenures. As well as providing affordable homes to buy, the UK Government understands that both social and private rented homes are a vital part of the housing mix.

On downsizing, the Chancellor said that the key to encouraging people to move was to ensure that the right choice of homes was available. This will help first-time buyers onto the housing ladder and allow people to move into appropriate and accessible housing as they get older, freeing up more larger homes for families.

Leasehold equality:

One journalist and leaseholder challenged Reeves on whether a Labour government would take on Labour councils who owned freeholds on ex-council flats. The Chancellor was clear that rules on leasehold would apply equally to private and public-sector freeholders.

Nathan Emerson, CEO of Propertymark, commented:

“It is encouraging to see that the new UK Government is committed to reforming the planning system and delivering thousands of new affordable homes each year.

“Propertymark is keen to see a diverse mix of housing delivered that keeps pace with real-world demand.

“Fine details about reform to the National Policy Planning Framework must be mapped out and open to full stakeholder scrutiny.

“Whilst we support more homes being constructed, there needs to be careful consideration of background infrastructure to ensure we are making the best use of available land, ideally prioritising a brownfield and grey-belt-first approach.”

You can a transcript of the full speech by the Chancellor here.

Kindly shared by Propertymark