Missions, targets and milestones

Posted: December 6, 2024 | Author: julesbirch | Filed under: Housebuilding, Planning, Social housing |Leave a comment

Originally written as a column for Inside Housing.

Housing looked like an afterthought when Labour first set out what would be its missions and first steps in government.

Five months on from the election, though it is still a means to the end of the second mission of ‘kickstarting economic growth’, the manifesto target of 1.5 million new homes in this parliament has moved centre stage as one of five milestones against which the progress of that government wants to be measured.

But Thursday’s big launch of the Plan for Change still begs some very big questions when it comes to housing.

For starters, it’s a funny kind of milestone that will only be visible after the end of the journey: we won’t know for certain whether 1.5 million homes have been delivered in this parliament until well after the next election. 

This parliament will run from July 2024 to (at the latest) July 2029. The net additional dwellings statistics for the last 15 months of that period will not be published until November 2029 and November 2030.

More fundamentally, while everyone likes the idea of an ambitious and stretching target, I’ve yet to speak to anyone who thinks that 1.5 million homes is remotely deliverable within that timescale. 

The starting point of the 221,070 net additional homes delivered in 2023/24 was already down on previous years and we have not achieved the implied annual target of 300,000 new homes since the heyday of council housing.

Even then, we are talking about more than just housebuilding numbers. A net increase in the dwelling stock means allowing for demolitions as well as new homes: on that basis, the highest number of net additional homes achieved in any year since 1969/70 is just 254,000. 

Next there is timing. Getting anywhere close to 300,000, let alone 1.5 million over five years, depends on the foundations of planning reform, land assembly, skills and capacity to be in place already, not only just coming back from consultation. 

The homes will also need to be in the right places, which will mean forcing councils to accept planning targets for their areas.

Answers on some of these issues are due to emerge in the new National Planning Policy Framework this week, along with a white paper proposing rapid approval for housing schemes that comply with local plans.

However, even if planning obstacles can be removed, there are basic questions about who will be able to afford to buy homes at prices that developers can afford to build them. 

Consider how the prime minister framed this in his speech: ‘Britain rebuilt with 1.5 million new homes, so the security I enjoyed when I was growing up, the ‘base camp aspiration’ of home ownership, does not move further and further away from working-class families like mine.’   

The sort of three-bed semi-detached where he grew up in Oxted in Surrey now sells for £500,000 or more, which seems out well of reach for a toolmaker and a nurse now. Base camp is much higher up the mountain.

We have moved away from a traditional market led by first-time buyers and starter homes to one with lower output, higher prices and higher profits in which home ownership prospects increasingly depend on access to family wealth.

If it is even possible (a big if), transitioning back will take consistent action over a long period and more than just new supply on its own. Badly needed long-term reforms that might help, such as a new generation of new towns, will only be starting to have an impact by the end of this parliament. 

More fundamental questions flow from this, such as whether 1.5 million new homes would really make much difference even if it could be achieved. 

It certainly will at the margins but real progress will surely depend on repeating it parliament after parliament. 

And make a difference to what? Remember that this is part of the mission to kickstart economic growth and it is accompanied by a second milestone of 150 major infrastructure projects. 

Supporters of increased supply see improving housing affordability as the real goal but there is no mission along those lines even though the government is making all the right noises about it.

Where this and the other milestones will make a real difference is inside government: Labour has staked its political future on hitting them and that will help cut through inertia in Whitehall.

However, there are different ways of looking at that. 

On the plus side, a substantial contribution from social and affordable housing will be essential and that should focus minds inside the Treasury ahead of the spending review next year. The £500 million announced in the Budget will not touch the sides.

Equally, there seems to be an assumption in some quarters that more affordable homes will be a cost-free consequence of increased overall housebuilding (via a reformed Section 106 process) rather than a costly contributor to it. 

On the downside, an increasingly desperate search will soon be underway to boost private sector output and housebuilders will be only too ready to recommend a repeat of Help to Buy.   

The government must avoid the temptation to adopt short-term fixes to achieve an arbitrary target in the medium term. 

The real prize for economic growth and housing affordability will be to find a sustainable path to boosting housebuilding in the long term. Which sounds like a good starting point for a mission. 

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