New Chancellor restores housebuilding targets

New Chancellor Rachel Reeves has used her first speech to reinstate housebuilding targets and pledge to build one and a half million homes over the next five years.

It comes after the previous Tory Government had scrapped targets to appease backbench MPs.

But Reeves said Deputy Prime Minister and Housing Secretary Angela Rayner will write to local planning authorities alongside a National Planning Policy Framework consultation, making clear what will now be expected of them.

This includes universal coverage of local plans and reviews of greenbelt boundaries. 

These will prioritise Brownfield and grey belt land for development to meet housing targets where needed, Reeves said.

Reeves added:

“Planning reform has become a byword for political timidity in the face of vested interests and a graveyard of economic ambition.

“Our antiquated planning system leaves too many important projects getting tied up in years and years of red tape before shovels ever get into the ground.”

It comes as research by Jackson-Stops showed a fifth of the nation believe building on brownfield land and low-quality grey belt land would improve the housing market, rising to a quarter among over-55s.

Nick Leeming, chairman of the agency brand Jackson-Stops, said:

“Buyers and sellers alike should take comfort in Labour’s focus on housing so early on; but in the short term the market is likely to remain on the same trajectory as the first half of 2024 as we wait for changes to start to filter through into actions. 

“The property market can take comfort in its resilience, having navigated changing Governments and policy changes time and time again, though this focus on housing building and planning reform is a marked change from recent years.”

Agents and property professionals welcomed the commitment but await more details, particularly on who will do the building.

Dominic Agace, chief executive of Winkworth, said:

“It is good to see some positive statements coming out on housing from Rachel Reeves’ first speech focusing on housing delivery and resolving the issue of under-funded planning departments creating delays.  

“The intent definitely appears to be there to solve two parts of the puzzle.

“We wait to see how the final part takes shape – encouraging housebuilders to build the homes in a difficult economic environment with a high cost of labour, materials and perhaps most importantly high interest rates.”

Nathan Emerson, chief executive of Propertymark, added:

“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.”

But the trade body higlighted the challenge ahead, calculating that to meet its manifesto pledge of 1.5m new homes within this parliamentary term, Labour must deliver just over 1,150 new homes consistently every single working day for the next five years without defaulting – this is roughly equivalent to delivering at least five large scale housing estates every single week to achieve the newly set housing target.

Emerson added:

“There is no doubt that the new UK Government must prioritise building homes the nation desperately needs, and that is why we welcome a commitment to deliver new homes and review green belt boundaries with a view to prioritising brownfield and grey belt land to meet manifesto pledges.  

“Local councils need as much support as possible in meeting the new UK Government’s aims.

“Building 1.5 million new homes by the next general election is an challenging target, but Propertymark would like to see urgent clarity and detail as to how this ambition can be achieved.

“This goal would require over a thousand new homes to be built every working day before 2029.”

Brian Berry, chief executive of the Federation of Master Builders, warned that while there are many positives to take from the new Chancellor’s announcement, the UK is currently experiencing a construction skills crisis.

Berry said:

“There are serious questions to be asked about how deliverable any of this is, without a long-term training and skills plan to ensure the workforce is in place.”

Roger Barrett, Connells Group land and new homes managing director, was less enthusiastic though.

Barrett said:

“This announcement doesn’t go far enough for me.

“There is much more that needs to done to address the issues the industry faces, including increasing supply, implementing ‘local plan’ processes to support the delivery of new homes, finding a resolution to the water neutrality requirements (which has already blocked 160,000 homes and could cause a fall of a further 41,000), investing in local planning authorities and reforming planning structures, introducing an effective replacement for Help to Buy and improving economic uncertainty which, of course, is impacting market confidence.”

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