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Building Blocks: How will Labour get housebuilding on track?

7 min read

Keir Starmer has promised to ‘bulldoze’ the planning system to spur a boom in housebuilding. But with little detail, are cracks beginning to show in Labour’s proposals for housing reform. Rob Merrick reports

Keir Starmer chose a dramatic metaphor to make clear his determination to build the homes Britain needs, evoking memories of the stunt pulled by Boris Johnson when he vowed to “get Brexit done”, whatever it took.

Condemning a “restrictive planning system” that is crushing the hopes of “millions who deserve the security of home ownership”, the Labour leader told his party gathering: “Conference, we must bulldoze through it.”

There would be “no more land-bankers sitting comfortably on brownfield sites”, refusing to let the diggers in, and “no more councils refusing to develop a local plan” for fear of offending powerful opponents of development, Starmer vowed last October.

The language, in such stark contrast to his caution in many other policy areas, suggested a Labour government will draw a line under decades of failure – by parties of all colours – with bold action to finally tackle the housing crisis. But will it?

Four months after Starmer’s speech, with an election win ever more likely this autumn, housing experts are warning Labour is yet to explain how its plans can deliver the promised 1.5m homes in five years, and questioning whether they really add up to a “bulldozer” waiting in the wings, while highlighting key questions the party is swerving.

What specific planning laws will Labour rip up? How much low-cost social housing will be built and how will that be funded? Will the party take on the dominance of the ‘big eight’ housebuilders, to bring in new suppliers? How much will a promised “comprehensive mortgage guarantee scheme” for first-time buyers cost?

Will Labour bring back section 106 agreements to ensure recreational facilities and other infrastructure alongside new homes, or introduce a new system? Will it seek to ‘downsize’ older people in large homes they no longer need, to free up space? Or tackle the Airbnb explosion? How can near-bankrupt local councils speed up planning permissions?

Where will the skilled workers needed to build and fit these homes come from, in Brexit Britain? Will Labour underline its intent to go big by making housing a Cabinet post? What about the immediate homelessness crisis?

Labour, if it wins, will take power with housebuilding in sharp decline

The scale of the task is daunting. Labour, if it wins, will take power with housebuilding in sharp decline. The Conservatives achieved 240,000 net new homes in 2022 – but, after mandatory local targets were axed under pressure from Tory MPs, planning applications have fallen to a record low in England.

Starmer has promised 1.5m new homes over five years. But, as a major new study published by the London School of Economics (LSE) points out, the government’s own forecast is that 1.6 million more households will be created over 10 years – gobbling up most of that tally, even if it is achieved, and doing little for current “unmet need”. Some 60 per cent of planning authorities in England do not have an up-to-date local plan, it notes.

One of its authors, Christine Whitehead, the LSE’s professor of housing economics, is “very doubtful” that Labour can deliver, saying: “It’s all a bit pedestrian, it looks a lot like what has been done before and it doesn’t excite anyone – it certainly doesn’t excite me.”

Dr Tom Archer, a housing expert at the Centre for Regional, Economic and Social Research at Sheffield Hallam University is more optimistic, but awards Labour only a “C+” for its current plans, adding: “There are some good ideas, but much more is needed to achieve their ambitions.”

So what do we know about Labour’s intentions and where are the gaps? The party has highlighted commitments to build more “new towns”, to “unleash mayors” with stronger planning powers – and yet also to set up Heseltine-style development corporations, to prepare sites for building – to strengthen compulsory purchase orders and, controversially, to build on parts of the green belt.

The party’s 112-page policy document, agreed in October, makes numerous references to the need to “tackle”, “reform”, “revise” or “update” the planning system – without pinpointing which parts of it will go. In fact, Labour has since suggested it will keep the existing system, but “streamline” it to work faster.

Worse, the elephant in the room, say critics, is Labour’s silence on social rented housing. These are often the only homes affordable to low-earners – at typically half private sector rents – but only 9,561 were built between 1 April 2022 and 31 March 2023, while 27,616 were sold or demolished, fuelling a surge in homelessness and rough sleeping.

At the 2019 general election, Labour pledged to build 150,000 social homes a year. A 2020 cross-party report by the Commons’ housing committee concluded that 90,000 are required, noting huge – and growing – local authority waiting lists.

Yet Labour has announced no building plan, just a promise to “champion social and affordable housing” and to rein in right-to-buy sales of social and council homes by slashing discounts.

Meanwhile, a commitment to make social housing a bigger form of tenure than private renting – requiring more than 400,000 to be built – has been watered down to a “long-term aspiration”, alongside a wishy-washy “aim to ensure housing adequacy in the long-term”.

Kate Henderson, chief executive of the National Housing Federation, says: “Our research shows we need to build 90,000 socially rented homes each year to house all those in need, including homeless families; more than 10 times the number built last year.”

Clive Betts, the housing committee’s Labour chair, agrees it will be impossible to achieve 300,000 new homes a year without building tens of thousands for social rent, “for people who cannot afford to buy”.

“As our committee has found, that will need a significant extra public contribution to ensure they are built,” he says. His committee’s report put the annual bill at £10bn – at a time when Labour is refusing to make specific spending commitments.

Dr Archer agrees the stance on social homes is “vague” and little different to the Conservatives’, but has a deeper worry; that the “market power” allowing the big housebuilders to “control development” will be left untouched.

He says: “When Labour says ‘we back the builders’, a bit of me winces, because if that means backing the volume housebuilders then we will continue to pay over the odds for houses. This is what they need to give more thought to – we need to diversify our housing supply system.”

Professor Whitehead points out existing housing will continue to make up 99 per cent of the total stock – regardless of the rate of building – and that the next government must grasp that nettle.

“A third are owned by over-65s, they have a lot of space with very few people living in them – but they won’t move. If they were to move, it would increase productivity a lot, but you have to provide incentives and suitable housing for them,” she says.

Local councils will be crucial to building more homes, but “simply don’t have the resources”, Whitehead warns, adding: “Planning permissions are taking two years, instead of six months. They must be given a proper income stream by changing the council tax system to relate it properly to housing value.”

Is Starmer firing up that bulldozer he promised? Not according to Dr Archer, who says: “As it currently stands, it doesn’t look like bulldozing through the planning system. There needs to be a lot more and, at the moment, we don’t know enough about Labour’s plans.”

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