What can the Housebuilding industry take from Labour’s first 100 days in office?

It was clear when Labour announced their plans to build 1.5 million homes in five years that house building was going to be a priority of the new Government.  As well as boosting the UK’s housing stock, this Government has promised to address the shortage of affordable homes, build quality and sustainability.  What have we seen in the first 100 days of Keir Starmer’s administration that could make this election pledge a reality?

Housing Targets

The promise to build 1.5 million homes throughout this current parliament averages 300,000 new homes per year for the next five years, a figure the UK has not reached for decades.  It isn’t clear whether this is a net addition of 1.5 million homes to the UK housing supply or the construction of 1.5 million homes will be started over the next five years.  Either way, this means the Government is giving all Councils in England mandatory housing targets - reversing the previous Government’s decision to make housing targets merely advisory to boost the granting of consents.  The Deputy Prime Minister Angela Rayner has written to every Council Leader in England making it clear that if these targets are not being met, she will not hesitate to use her powers of intervention.

The Grey Belt

Anyone who works in the housebuilding industry will be no stranger to the desire of policymakers to repurpose brownfield sites for housing.  However this Government wants to unlock a new colour of land – the Grey Belt.  The Government has previously described the Grey Belt as land of "poor quality" within the Green Belt.  Will unlocking these ugly parts of the Green Belt, which are currently undevelopable because of their designation, help meet the ambitious targets?  My colleague Titilope Hassan looked at the Brownfield v Grey Belt v Green Belt debate here.

There aren’t currently any official figures on how much Grey Belt land there is in the UK and how many homes can be built on it to achieve the targets. Labour’s pledge that these Grey Belt sites offer 50% affordable housing leads us to something else casting a shadow over the industry.

Affordable Housing

If the Government wishes to achieve the ambitious target, the chronic under funding of Affordable Housing will need to be addressed.  Research by Savills, the National Housing Federation and the Home Builders Federation found grant funding has to increase dramatically to allow Registered Providers (RPs) to be able to acquire more homes (please follow the link here). RPs in London started only 150 new homes in Q2 2024, a 92% year on year drop.  The challenges are numerous – the cost of historic repairs soaring, increase in construction costs and new sustainability targets to name a few.  All of which will not be mitigated until further grant funding is made available.  Not many Housebuilders are able to shoulder the costs of development without a RP on board from the start.  Until we see the RP market rebound, it is difficult to see how the industry will get close to the housing targets being dictated to Councils.

Quality & Sustainability

It is not just quantity the Government is concerned about but also quality.  Whilst new low-carbon standards would save buyers and occupiers money on their bills in the long run the installation of the solar panels, heat pumps, insulation etc. needed isn’t guaranteed.  It isn’t yet clear how (and when) the Government will act on the Future Homes Standard. Clarity is needed. 

Labour’s first 100 days have certainly shown a lot of intent by ministers, especially on affordability, sustainability and quality. The Government will be judged on whether they can get 1.5 million homes built in the next 5 years. But with the industry battling rising construction costs, a RP market in need of stimulation, the protection of the Green Belt stemming development and the still unknown impact of net-zero, the task seems herculean.  The government has thrown down the gauntlet for itself with its ambitious housing targets and it will need bold action to have any chance of hitting them.