Over the next twelve months, Labour should clearly signal to the development sector how it intends to get Britain building.
1.5 million new homes over five years. Announced on the conference floor to cheers and applause in a speech where Keir Starmer set out his vision for an incoming Labour government. But two days earlier when the 1.5m figure was trailed on Sunday with Laura Kuenssberg, guest host Victoria Derbyshire asked the extremely fair question, “How?”. Neither in the TV interview nor his conference speech, nor his interview this morning on the Today programme did Starmer answer this question.
I sympathise with Starmer’s predicament. Unveiling policy solutions that would truly address the housing crisis would provide greater ammunition to Conservative MPs desperate to hold on to marginal constituencies in towns and suburbia where the next election will be fought and where much of the new homes are needed. However, if Starmer sets out popular planning reform ideas now, the Government is well poised to pinch them. The former Labour campaign strategist in me says ‘keep schtum’.
But the less Labour say about their plans for housing before the election, the slower the delivery of new homes after the election.
Government has shown itself to be woeful in communicating clearly and quickly to the development sector. Councils have paused their local plan process amid mixed signals of Government’s intent. The consultation on second staircases came in December 2022, the 18m policy was announced in July 2023 and even today we don’t know what form these staircases need to take to comply. These farces inevitably cause delay, by failing to communicate clearly on housing, Labour are in danger of repeating the same mistakes.
Starmer has said that ‘to build a new Britain’ Labour will ‘bulldoze’ through the planning system. This image is one of dynamism, the reality is that this will take time. And even if political decision making could be expedited to a speed not seen since the time of Michael Heseltine, the development sector will require time to fully absorb Labour’s reforms and plan accordingly.
Every month of delay puts that 1.5m figure further in doubt.
For the last two years the annual rolling total of housing completions has hovered between 182,000 and 171,000. Inflation and political uncertainty have led to fewer housing starts sending the trend downwards.
2025 is likely to be the first full year of a Labour Government and they will be lucky to inherit a housing pipeline delivery of 175,000 completed homes. To hit the 1.5m target, they will need to deliver an additional 65,000 more homes each year, reaching 425,000 homes in 2029. If the 175,000 figure endures for just one more year into 2026, then Labour will need to deliver an additional 105,000 new homes every year to stay on track reaching almost half a million homes needed in the final fifth year.
The longer Labour take to get Britain building the more impossible their 1.5m goal becomes.
Labour can reduce this delay by setting out how they will get Britain building and thereby reduce the amount of time the housing sector requires to fully absorb their policies and prepare accordingly. A clear steer from Labour on its intentions would also give developers greater confidence, further encouraging bringing forward sites they may otherwise have held back.
There would potentially be a political price to pay in the upcoming election, but it would give Labour a significantly better chance of being able to point to a strong record of housing delivery come the next election if Labour seizes this opportunity. And besides, it would also just be the right thing to do.
The development sector deserves concrete plans from Labour. So far, they’ve only been given rhetoric and ambiguous commitments which, for short, I will be calling RAAC.
12 October 2023