The Government's welcome planning reforms could deliver a step
change in housebuilding over the parliament. But it will need to
bolster these reforms with direct investment if it is to meet its
target of creating 1.5 million more homes over the Parliament,
according to new Resolution Foundation research published today
(Thursday).
The report Building Blocks examines whether the
Government's wide-ranging policy programme could boost
housebuilding by enough to meet its stretching housing target –
which hasn't been hit on an annual basis in over half a century –
and what other reforms may be needed to boost housing supply.
The report says that the Government's decision to put local
authority housing targets back on a ‘mandatory' rather than
‘advisory' footing, as they were before December 2023, is a
welcome first step on the housebuilding ladder. This, combined
with a new formula for setting targets, should enable a faster
pace of development.
Changes to the formula means that housebuilding targets have
increased by an average of nearly 50 per cent across the most
affordable half of local authorities (assessed in terms of house
prices relative to earnings), compared to just over 10 per cent
on average for those in the least affordable half.
As a result, housebuilding targets across London have been
greatly reduced. While this has drawn criticism from YIMBYs in
the capital, the Foundation notes that the previous targets for
London were unrealistic to start with and that, overall, hitting
the new targets would still mean more homes being built in areas
with low affordability than currently are.
The Government has also announced plans to prioritise
housebuilding on brownfield land and release low-quality Green
Belt land for development. Together, these reforms could provide
enough land to build over a million new homes.
But the Foundation's research shows that, although this will
create the space to build more homes, hitting the 1.5 million
target will require the use of undeveloped land equivalent to the
same size as the area of the current ‘grey belt'. Alternatively,
developers would need to build homes at a higher density on
brownfield and ‘grey belt' land, equivalent to an additional
storey on around two in five of these homes.
Delays in getting planning permission is often cited as a barrier
to development, and the Government has said it will address this
by funding 300 new planning officers to approve new construction.
However, the Foundation cautions that this extra support is small
fry in the context of the number of planning officers falling
from 15,000 to 12,000 during the 2010s as local authority budgets
were cut, and is equivalent to less than one additional planning
officer per local authority in England.
And with the construction sector shrinking as a share of the
workforce and ageing too – the share aged 50 and over has
increased from around one in four in 2005 to a third in 2024 –
there are questions over how ready developers are to build at
scale.
The Foundation says that the main overall barrier to meeting the
Government's housebuilding target is the fact that the reforms
are currently too reliant on the private sector to deliver new
housing. History suggests that the state also needs to play a
role. For example, in the post-war housebuilding peak of 1968,
two-in-five homes were built through the public sector.
A greater role for the public sector is also needed to boost the
supply of affordable housing. While private developers should in
theory deliver 8,500 additional affordable homes each year if
they hit their target of delivering 300,000 homes overall, enough
to return the supply of affordable back to early 1990s levels,
these obligations on affordable housing (‘section 106
contributions') are often watered down in order to get
developments built.
The Foundation says that the Government will need to commit
significant public investment for affordable housing in its
upcoming Spending Review if it is to deliver on its overall
housebuilding target, and provide the promised boost to social
housing boost.
Camron Aref-Adib, Researcher at the Resolution
Foundation, said:
“The Government has set an ambitious target to deliver 1.5
million more homes over the parliament, and followed up with
welcome planning reforms to encourage private developers to get
building as soon as possible.
“Giving local housing targets more teeth and opening up more land
for development should help to boost housing supply, as long as
the Government holds its nerve against local opposition.
“But while these reforms are necessary, they are not sufficient,
as they rely too much on private sector delivery. If the
Government wants to build the 1.5 million more homes that Britain
needs, there's no alternative to direct intervention via greater
public investment in affordable housing. That's the only way
Britain has built at scale in the past, and it's crucial to
delivering in the future too.”
