Labour Government Announces New Housebuilding Targets

In her first speech as chancellor, Rachel Reeves announced that the new Labour government would bring back housebuilding targets. The government aims to build 1.5 million new homes over the next parliament.

The chancellor stated a desire to “get Britain building again”, with the policy set alongside the government’s desire to grow the economy.

Housebuilding is seen as a key tenet of economic growth and was announced alongside other measures, such as overhauling planning restrictions and lifting the ban on onshore wind farms.

As we wrote before the election, housebuilding was a key part of Labour’s offer to voters, and they have wasted no time affirming their commitment to reaching their manifesto goals.

This will be great news for first-time buyers and others looking to get on the property ladder. The lack of supply has been a major issue in the UK for a long time, and the commitment to build more homes and several new towns should help alleviate this issue.

As well as the commitment to building 1.5 million new homes over the next five years, the government also announced the following:

• Planning decisions for important infrastructure projects will be made nationally instead of locally to prevent them from becoming mired in red tape and to speed up the process.
• Green belt boundaries will be reviewed to prioritise brownfield land for development, such as disused car parks or wasteland.
• More planning officers will be hired to speed up the planning process.
• The transport and energy secretaries will prioritise infrastructure projects that have been waiting for a decision for too long.

The above will tie in with the commitment to build more homes and help the government meet their target.

An overhaul of the planning process has been necessary for some time, with many developments blocked due to local opposition or tied up in red tape.

Prioritising brownfield sites for development is a sensible decision that should allow plenty of affordable homes to be built in derelict areas.

Reeves stated that Labour’s commitment to build 1.5 million homes was not a “green light” for any development. Instead, the developments will be thought through rather than haphazardly.

She also confirmed the “right mix” of affordable housing and social rent properties will be built. This is welcome news, particularly on the latter, as the social housing stock has never recovered from the introduction of the Right to Buy scheme.

Replenishing the stock will help the many thousands of people who are on the social housing waitlist. Building more affordable homes will also help many people transition from renting to owning their own property.

A notable exception in Reeves’ speech was any scheme to help first-time buyers get on the property ladder. Labour had set out plans for a mortgage guarantee scheme in their manifesto, but there was no mention of this.

It remains to be seen whether it will be introduced later or if the government will extend the current one. With the end of the Help to Buy scheme and accusations of whether it benefited first-time buyers or property developers more, it’s perhaps understandable that the government is biding its time before introducing any such scheme.

Who will benefit from this announcement?

The primary groups that will benefit from the government’s announcement will be first-time buyers and people currently in the rental sector.

If Labour meets its pledge to build 1.5 million homes in the next five years, this will go a long way to increasing the housing supply, which hasn’t been able to meet demand in recent times, hence the rise in house prices.

The chancellor made it clear in her speech that houses will be built across the country. The announcement should benefit people across the country, not just a select few in certain parts of the UK.

Can 1.5 million homes be built in the next five years?

It’s an ambitious goal, and as the last Conservative government failed to meet their targets and even abandoned them, it’s not an unreasonable question to ask.

With public finances stretched, the government will rely on the private sector to help it reach its target. It will be a tough ask, but the announcements in the chancellor’s speech indicate Labour is serious about succeeding where the Conservatives failed.

Hiring more planning officers and prioritising development in brownfield land are positive steps. If the delivery can match the ambition, Labour could achieve its goal or at least get close to it, which will please many people looking to get on the property ladder in the next five years.