Ambitious Housing Plans – 1.5 Million in 5 Years?

Roger is back to rant about the new Labour government’s big housing mistake

Labour’s ambitious plan to build 1.5 million homes over the next five years aims to tackle the UK’s critical housing shortage, which has led to skyrocketing rents and home prices.

The strategy involves several key components, including extensive planning reforms, establishing new development corporations, and prioritising affordable housing and infrastructure projects.

Rachel Reeves, the Chancellor, and Angela Rayner, the Deputy Prime Minister and Levelling Up Secretary, are spearheading this initiative.

The plan includes reinstating compulsory housebuilding targets for local councils, which the previous government removed. This move will streamline approval and fast-track urban brownfield developments through a “planning passport” system.

Moreover, Labour intends to create new towns with beautiful homes, green spaces, reliable transport links, and bustling high streets.

A government-backed mortgage guarantee scheme will give first-time buyers priority access to new housing developments.

Additionally, the plan includes lifting the de facto ban on onshore wind projects and prioritising energy infrastructure projects to support new housing​.

Despite the comprehensive nature of Labour’s plan, several factors suggest that the target of 1.5 million new homes may be overly ambitious and could be missed by some margin.

Firstly, the UK’s construction industry faces significant challenges, including supply chain constraints and a shortage of skilled workers.

Paul Maile, a senior planning partner at law firm Eversheds Sutherland, highlighted these obstacles, noting that achieving such high targets requires substantial improvements in the availability of construction materials and skilled labour​.

Moreover, the historical context indicates that reaching 300,000 new homes annually is daunting. The UK has not achieved this level of housebuilding since the 1950s.

Only 135,000 homes began construction in the year leading up to March 2023, a decline of more than 20% from the previous year. This shortfall underscores the difficulty of scaling up construction efforts to meet Labour’s ambitious targets​.

Additionally, Labour’s plan faces potential opposition from local communities, often referred to as NIMBYs (“Not In My Back Yard”).

Rachel Reeves acknowledged this challenge, stating that while planning decisions still involve local communities, compulsory targets limit their ability to reject new developments.

This tension between national housing needs and local opposition could slow the approval and construction processes, further complicating efforts to meet the 1.5 million homes target​ (ITVX)​ (Evening Standard).

While Labour’s plan to build 1.5 million homes in five years addresses a pressing issue and incorporates several innovative strategies, the ambitious nature of this target and the significant challenges involved suggest that it may be difficult to achieve.

Supply chain issues, labour shortages, historical construction trends, and potential local opposition pose substantial risks to meeting the proposed housing goals.

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