The Chancellor has unveiled mandatory housebuilding targets and hinted at Labour’s upcoming plans for the private rented sector.
Reeves’ commitments include:
- Restore mandatory housebuilding targets;
- Build 1.5m homes by the end of this parliament - including affordable and council homes;
- End the onshore wind farm ban;
- Create a new task force to accelerate stalled housing sites - starting with 14,000 new homes across Liverpool Central Docks, Worcester, Northstowe and Langley Sutton Coldfield;
- Support local authorities with 300 additional planning officers across the country;
- Review planning applications previously turned down that could help the economy - planning appeals for data centres in Buckinghamshire and in Hertfordshire are already being reconsidered;
- Prioritise brownfield and grey belt land for development to meet housing targets when needed;
- Reform the planning system to "deliver the infrastructure that our country needs" - unresolved infrastructure projects to be prioritised; and
- Set out new policy intentions for critical infrastructure in the coming months.
In her first speech as Chancellor, Rachel Reeves announced a reform of the planning system and reiterated Labour’s pledge to ban no-fault evictions.
Ms Reeves also confirmed she will set a date for the Autumn Budget before the summer recess.
1.5 million homes target
The Chancellor revealed plans to build 1.5 million homes in the next five years, including ones for social rent. To hit this target, the government needs to build 300,000 homes a year. An ITV reporter asked Ms Reeves about Labour’s ambitious housing targets, pointing out it hasn’t been seen in the UK since the 1950s.
The Chancellor says "14,000 new homes will be spread across England and stressed the need to ramp up construction. We can’t build overnight, but that’s why we have set out today the initial steps that we are going to take to unlock private sector investments to build those homes.”
Labour hints at plans for the private rented sector and social housing
When asked by Channel 4 News about Labour’s social housing plan, the Chancellor stressed the importance of social housing and pledged to ban no-fault evictions.
She said “affordable housing, including social rent, is a key part of our goal to build 1.5 million homes. For those in the private rented sector, we are also going to reform the rules around that so that we will finally get rid of no-fault evictions to help those who are not fortunate enough to own their own home or have access to social housing.”
In response to a question from The Guardian about energy efficiency targets for social housing, Ms Reeves mentioned that more details would be announced by Energy and Net Zero Secretary Ed Miliband and Housing Secretary Angela Rayner in due course.
The answer cannot always be no
The Chancellor also criticised “the red tape that has stalled too many projects” and promised to reform the national planning policy framework to deliver infrastructure. The Chancellor confirmed that Deputy Prime Minister Angela Rayner will write to local councils and planning authorities to review green belt boundaries to meet housing targets.
Ms Reeves gave more details on Labour’s plan “first of all, it will still be in the first instance up to local communities and local authorities to decide where housing is built. But we will bring back those mandatory housing targets so the answer cannot always be no. It will be up to local communities to decide where the housing is built but it has to be built.”
Nathan Emerson, chief executive officer of Propertymark says "more detail is needed on how the plans will work in practice. Fine details about reform to the National Policy Planning Framework must be mapped out and open to full stakeholder scrutiny. It’s crucial there is transparency on how they intend to meet their ambitious target of building 1.5 million new homes by the end of its term in government, which in reality would mean having a large housing estate built every day before the next general election. Whilst we support more homes being constructed, there needs to be careful consideration on background infrastructure to ensure we are making the best use of available land, ideally prioritising a brownfield-first approach.”
Will apply to local authorities
Ms Reeves was also asked about leaseholders and whether the party would hold Labour councils, who are freeholders of council flats, to the same rules as private freeholders. She said: “Yes of course that will apply for local authorities as much as it does for private sector landlords.”
RICS Urges Labour To Move Quickly On Housing Pledges
The Royal Institution of Chartered Surveyors has congratulated Labour on forming the next government but says it must move quickly to honour its housing pledges.
Justin Young, chief executive, says “it’s vital that they bestow an urgency to translate the plethora of promises made over the last five weeks into sound and workable policy” and he sets out four areas of action that the institution’s 130,000 members would like to see.
Housing Delivery
Young continues to say “Labour’s ambitions are bold, but by pulling the right policy levers, they can be achievable. Delivering 1.5 million homes over a five-year period will be no easy feat. To achieve this, the public and private sectors would be required to deliver 300,000 new homes a year – a figure not hit since the 1960s, which was a time when local councils played a far greater role in housing delivery.
Therefore, policymakers must introduce in a timely manner a programme of policies that speed up development and add significant resource to planning departments up and down the country. This will be particularly pertinent in Labour’s quest to achieve economic growth; many studies have agreed on the positive correlation between GDP growth and the availability of homes. If housing delivery is backloaded towards the end of parliament, then the electorate may not see benefits quickly enough.
Housing Ministers
Real, meaningful change requires long-term stability. Regardless of who is assigned to key positions across our sector, they must be given the time to executive their mandate; one of the reasons why we’ve seen such a lack of progress in housebuilding and construction is because we’ve had 16 housing ministers since 2010.
To speed-up decision making, policymakers must ensure planning departments are properly resourced. Labour has promised 300 extra planning officers. While collectively a big number, this amounts to less than planning officer per local authority. Resource will be key to achieve significant planning reforms. As well as speeding up decision-making, planning reform is needed to ensure we empower SMEs housebuilders to add additional capacity and expertise. Smaller builders require much more certainty – something the current system does not deliver.
Skills Shortage
Policymakers must also address the skills shortage - otherwise the UK will be unable to deliver on its 300,000-homes-a-year target and £805 billion infrastructure pipeline. At RICS, we are calling for Government Departments to work together to create a Built Environment Taskforce. The body should be responsible for mapping future labour needs to meet house building, retrofit and net zero needs. This will include a review of early-years education engagement including the introduction of a Built Environment GCSE in England, and an analysis of public sector skills retention and recruitment - including shared service planning models.
Commercial property
There must also be a focus on reforming the business rates regime. Commercial real estate plays a fundamental role in fuelling economic growth, creating jobs and supporting communities. These properties are not just buildings; they are essential, diverse spaces where businesses, from shops and offices to factories, operate and thrive.
The RICS 2022 Commercial Real Estate Impact Report illustrates that commercial real estate directly generates £66 billion in Gross Value Added, over £15 billion in tax revenues and employees more than 1m people. However, with valuations dropping by as much as half due to a high interest rate environment, both small and large investors are having to grapple with tightening yields and margins. Therefore, policymakers must reduce business rates, which have become too high, complex and burdensome, and threaten to suppress growth and discourage much needed inward investment.”
SME housebuilders urge for more planning funding
Over half (52.5%) of SME housebuilders have called on Labour to provide more funding for planning departments, a Knight Frank survey has revealed.
So far Chancellor Rachel Reeves has announced that 300 new planning officers will be recruited, which equates to less than one per local authority. Two in five (42.5%) developers would also like Labour to bring back five-year supply tests for all local authorities.
The five-year calculation determines whether there is a deliverable supply of homes to meet the planned housing requirement, or local housing need, over the next five years. The change developers most wanted has already been delivered, as 65% called for a reinstatement of housing targets. Labour has introduced a target of building 1.5 million homes in five years.
Anna Ward, associate in residential development research at Knight Frank, said “these survey results are a call for a reversal of some Conservative housing policies, from reinstating local housing targets to reintroducing the 5-year land supply test. But they also highlight long-standing issues that the housebuilding sector would like to see addressed, such as more funding for planning departments, as well as a step-change in approach, including loosening greenbelt restrictions.”
According to housebuilders their planning applications are currently being deterred by a lack of planning authority resourcing (67%), uncertain timescales to get planning determination (67%), as well as S106 Affordable Housing obligations/viability (59%).
Ward added “it is no surprise that planning applications in England are currently at an all-time low, given challenging market conditions. The majority of homebuilders, seven in ten, say that planning authority resourcing and uncertain timescales are key challenges followed by affordable housing obligations and viability. So, this points to a clear desire for more funding from government into both planning departments and the affordable housing sector.”