Can Labour really build 1.5m new homes? Not without 'bold' and urgent planning reform, experts say

Labour will miss its 1.5m housebuilding target by 2029 due to a “productivity crisis” that does not allow cities to “build an adequate supply of homes”, campaign groups have warned.

The Centre for Cities has claimed that Labour could fall short of its target by at least 388,000 homes, despite proposed planning changes, also claiming that Greater London could fall short of its 2029 target by 196,000, or 60% of its pledge.

The think tank found that based on historic trends, if private development rose to the same level as its strongest ever period, under the current planning system it would still fall 388,000 homes short of delivering the government’s target by 2029.

Centre for Cities claimed that in order to achieve housebuilding targets, a “bolder reform for the planning system” must be made, adding that the government is “faced with a choice either to scrap the green belt completely or remove the discretionary element of the planning system”.

Labour promised 1.5m new homes in order to tackle a housing crisis that has seen private rents skyrocket, house prices out of reach for many and surging homelessness, with the government setting local authorities the goal of building 370,000 homes per year to meet its targets.

Campaigners have also called for more affordable and social housing to be built, with charity Shelter claiming 90,000 social rent homes are needed every year for the next decade to tackle the housing crisis.

Labour has not set a public target for the number of social homes it hopes to deliver, however deputy prime minister Angela Rayner has called for a “council house revolution”.

Housebuilding will miss 2029 target by at least 388,000 homes despite revised planning policy 🎯

Historic trends show that, if private development rose to the same level as its strongest ever period of performance under the current planning system, it would still fall short.

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— Centre for Cities (@CentreforCities) December 3, 2024

“Rightly, the government has set a bold housebuilding target,” Andrew Carter, chief executive of Centre for Cities, said.

“For the country to achieve it, parts of England would have to reach an 80-year high in housebuilding. This would be a huge positive for the country but the approach has to be much more ambitious.”

He continued: “We’re in a productivity crisis. The UK’s big cities are the jobs and productivity engines of the economy but our planning system doesn’t allow – and has never allowed – them to build an adequate supply of homes for everyone that could work there.”

“By removing the discretionary element of the planning system, the UK would bring its planning system in line with most developed economies, remove a big block on housebuilding and enable places to better respond to future rises in demand for homes,” he said.

“We have done wholesale planning reform before and we can do it again… What we can’t do is raise national economic growth – and reduce the strain high housing costs place on people’s spending power – if we don’t address the backlog of missing homes.”

• Housing minister admits Labour’s 1.5 million homes promise will be ‘more difficult than expected’
• How Labour’s housebuilding target of 1.5 million new homes hinges on just six private companies

Addressing the Housing, Communities and Local Government Committee in November, housing minister Matthew Pennycook admitted that Labour’s pledge to build 1.5m homes is “going to be more difficult than what we expected” amid a deepening housing crisis.

He said: “We’re very, very candid about this: we knew that if we won the election we would be grappling with a difficult inheritance in respect of housebuilding as a result of the December 2023 changes to the National Planning Policy Framework, which exacerbated a fall in housing supply that had already been triggered by the present market downturn.”

Pennycook added that the younger generation has been “completely locked out of home ownership as a result of the steadily expanding gap between house prices and average earnings”.

“We’ve got millions of low-to-middle income households forced into insecure unaffordable and far-too-often substandard private rented housing. We have 1.3m people languishing on social housing waiting lists and, to our utter shame as a nation, more than 150,000 homeless children right now living in temporary accommodation.

“That is the price we have paid for not being serious about housebuilding rates.”

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