One month in: Will Labour meet it's housing targets?

What were Labour’s housing targets?

Before being elected, Starmer promised to deliver the “biggest boost to affordable housing in a generation”, including plans to build 1.5 million homes within the first 5 years and creating the "next generation of new towns".  

Since then, the housing secretary and Deputy Prime Minister Angela Rayner put some meat onto the bones of these pledges, unveiling to the Commons what was viewed as the most ambitious overhaul of Britain’s planning rules in a generation.

Not only that, she also reimposed mandatory house-building targets on councils, increasing them almost across the board. The North West saw its target increase by 76% to 38,000 homes, while the North East's has doubled. London's, on the other hand, was slashed from 100,000 to 80,000.

To help find sites for these houses, Labour announced a new definition of "grey belt" land which could be used for development, as well as a new task force to scout out potential sites. The grey belt is essentially unattractive or poor-quality green belt land (which is usually protected from development). But, there still haven't been any details of where these new towns will be, and some could only consist of 10,000 homes.

Why do we need all these homes?

On average, between 40,000 and 50,000 affordable homes have been built each year in the UK over the last two to three decades, roughly one-third of the 145,000 needed every year. 

That means we're now up to our eyeballs in a 30-year housing deficit. To tackle this shortfall, we need to come at the housing crisis from multiple angles, involving local councils as well as housing developers. 

Some are already on board. One of the UK's biggest house builders has already upped its housebuilding forecasts for the year, encouraged by the new government’s planning reforms.

There are still large areas of brownfield sites which could also be developed into new homes. This was done really well in Walthamstow Village, where 10 timber homes were recognised in this year’s RIBA London Awards for its zero-waste construction. Could more projects like this develop infill housing in our cities?

Another idea is to make the most of what we have... Transforming non-residential buildings into residential properties could play a substantial role in easing the housing crisis. 8 Canada Square, the first building in Britain to be sold for over £1bn is soon to be tenant-less. Once hailed as the cutting-edge of future design with the same amount of Grade A office space as the entire city of Manchester, their current tenant HSBC now plans to vacate to smaller premises by 2027. Demolition would be a waste, but could it be reimagined as residential flats?

Rewind back to the '70s (arguably the heyday of homeownership), there were grants to householders who took on the regeneration of historic properties. There are plenty of towns up and down the country with under-occupied historic centres thanks to the death of the high street. Could first-time buyers be offered similar grants to make homes out of our dusty town centres?

Would house building bring down house prices?

As a general rule, the less accessible something desirable is, the more people will pay to get it. So in theory, if we built more homes or there were more homes for sale, house prices should come down. We've already seen this happen over the last few months - there are more properties on sale than at any point in the last 6 years and as a result house prices have stayed pretty stable.

But remember that homeowners are not the only ones who may buy newly built homes. Investors and landlords could also pick up large numbers of new homes available, which could keep prices higher.

There are some ways to prevent this, for example, if home buyers are given priority or changes to stamp duty make housing too expensive an investment.

Mortgage rates continuing to come down will also relieve the current affordability constraints felt by home buyers and remortgagers alike. After last week's base rate cut announcement, we've already seen some lenders announce sub-4% fixed-rate deals for those with 40% deposits. 

But rates coming down will also give a bump to demand. Recent data shows the market is already getting busier. Buyers are now paying 96.8% of the asking price, the highest of any point in the past 18 months, with house prices now expected to rise by 2% this year.

Parting thoughts

While there are obstacles, it is exciting to see innovation and changes happening to support the house building we need - whether that's new homes, transformed office space or upcycled brownfield land. It could be a transformative few years for the housing market!