Housebuilding

A pivotal year in raising the rate of housebuilding?

The UK’s housing shortage is well documented, with annual housebuilding rates consistently falling short of demand, together with a considerable backlog of housing need. In 2023/24 new housing starts in England plummeted to 134,600, nearly 25% below the previous year, and the lowest level in over a decade, highlighting the problem.

To address this, the Labour government is proposing to reintroduce mandatory housing targets, with a stated aim of building 1.5 million homes in England over the next five years (300,000 per annum). This target is ambitious to put it mildly. Over the last three decades the maximum completed in any year was 175,000, and the build rate has not reached 300,000 since the late 1960s (when over 40% of dwellings were built by local authorities).

A new approach

The government has set clear policy objectives which take complementary approaches to this challenge, including both planning reforms and strategic land use decisions.

The recently-revised National Planning Policy Framework (NPPF) includes a new Standard Methodology for calculating Local Housing Need. This results in an increased target of 370,000 homes per annum across England, compared with 300,000 using the current method, and is designed to ensure that local authorities plan for sufficient housing.

Also included in the revised NPPF is the reintroduction of the requirement for local planning authorities to demonstrate a five-Year Housing Land Supply, which will help to ensure they can deliver land at the required rate.

Measures to improve the planning system for housing and supporting infrastructure will be vital. The Planning and Infrastructure Bill is intended to streamline the planning system for critical infrastructure, and make it easier to unlock new homes. The bill is expected to include elements to simplify and speed up the local planning process and deliver more affordable housing. It is expected to be introduced into Parliament early in 2025.

The Green Belt - less of a grey area?

Controversially, the government is proposing to deliver more housing within the Green Belt, prioritising Previously Developed Land and lower quality ‘grey belt’ land, while implementing ‘golden rules’ to safeguard the environment, deliver affordable housing and enhance local communities. The grey belt definition is currently under consultation, and the House of Lords Built Environment Committee has launched an inquiry into the NPPF revisions.

Despite understandable concerns, we are likely to see more residential development on lower quality green belt land. Our recent report “Rethinking the Green Belt” concluded that Green Belt land offers strong potential for edge-of-town development within close proximity to transport connections and amenities while preserving high-quality, biodiverse, and environmentally sensitive land.

Gearing up for new towns

The government’s most ambitious proposal is the delivery of new settlements (or new towns). It has demonstrated its intent by establishing the New Towns Taskforce, which is expected to recommend a shortlist of locations by summer 2025.

Large new settlements will be highly challenging to deliver and are a long-term solution, requiring a strategic approach to planning policy, as well as innovative mechanisms to forward-fund the necessary infrastructure and harness the private sector. Choosing the right locations and having the right governance structures in place will also be vital. The approach to, and potential locations for large new settlements should become clearer during 2025.

2025 – a pivotal year?

The government’s housebuilding target is highly ambitious, and unlikely to be achieved in any year to 2030, let alone as an average over the period. However, the ambition is welcome, and given that so much political capital has been invested in achieving a step-change in delivery by the next general election, the pace of housebuilding is likely to start accelerating. 2025 will be a crucial year on the road to achieving this, and we expect increased clarity and detail from the government on how it intends to boost delivery.