Updated: 28th August 2024
Updated: 28th August 2024
In her first speech delivered on 8 July 2024, Chancellor of the Exchequer Rachel Reeves MP outlined a comprehensive strategy to address the UK’s housing crisis and revitalise the country’s infrastructure as well plans to unlock a stalled planning system and make strides in the Net Zero strategy. The plans, which include restoring mandatory housebuilding targets and ending the onshore wind farm ban, represent a significant shift in government policy aimed at stimulating economic growth and improving living standards across the nation.
One of the most striking announcements in the speech was the decision to restore mandatory housebuilding targets. This move comes in response to the long held concerns about the shortage of affordable housing in many parts of the country. By reintroducing these targets, the government aims to ensure that local authorities and developers are held accountable for meeting the housing needs of their communities.
While the return to mandatory targets is likely to be welcomed by housing advocates, it may face resistance from some local authorities who prefer to maintain control over their development plans. The success of this policy will depend on how well it balances national housing needs with local concerns and environmental considerations.
The Chancellor set forth an ambitious goal of building 1.5 million homes by the end of this parliament, including a significant proportion of affordable and council homes. This target represents a substantial increase in the rate of housebuilding and reflects the government’s commitment to addressing the housing shortage head-on.
The economic implications of this ambitious plan are far-reaching. An increase in housebuilding on this scale could provide a significant boost to the construction sector, potentially creating thousands of jobs and stimulating related industries. However, it may also put pressure on an already very tight labour market, potentially driving up wages and construction costs, with a potential knock-on effect on inflation.
The focus on affordable and council homes could help address regional economic disparities, by providing more accessible housing in areas with high living costs, enabling greater labour mobility and help balance economic growth across different parts of the country.
The UK’s housing challenges are not unique. Many developed countries are grappling with housing shortages and affordability issues. For instance, New Zealand has recently implemented sweeping zoning law changes to increase housing density in urban areas, while Singapore has long maintained a successful public housing programme. The UK’s approach, combining mandatory targets with a focus on affordable housing, represents a middle ground between market-led and state-led solutions seen internationally.
The emphasis on council homes in the Chancellor’s speech is particularly noteworthy given the long-standing shortage of social housing in the UK. Over 1.1 million households are on waiting lists for social housing in England alone. The commitment to building more council homes could help address this backlog, but questions remain surrounding funding mechanisms and how quickly these homes can be delivered.
Quality standards for these new council homes will be crucial. Past social housing initiatives have sometimes been criticised for poor build quality or creating segregated communities. The government will need to ensure that these new homes are well-integrated into communities and built to high standards to avoid repeating past mistakes.
The environmental implications of these housing policies are significant and multifaceted. On one hand, the prioritisation of brownfield sites for development is a positive step towards sustainable urban growth. It can help regenerate disused areas and reduce pressure on greenfield sites. However, the mention of potential greenbelt development is likely to raise concerns among environmental groups.
The decision to end the de facto ban on onshore wind farms is a major shift in energy policy that aligns with the UK’s climate goals. Onshore wind is one of the cheapest forms of renewable energy and could play a crucial role in the UK’s transition to a low-carbon economy. However, the visual impact of wind turbines remains a contentious issue in many rural communities.
Balancing these housing and energy needs with environmental protection will be a key challenge. The government will need to ensure that increased development doesn’t come at the cost of biodiversity loss or increased carbon emissions from construction and new households.
For the planning sector, the government aims to unblock ‘stalled sites’ to advance housing schemes, starting with unlocking over 14,000 homes across Liverpool, Northstowe, Worcester, and Langley Sutton Coldfield. The Chancellor also confirmed the government’s support and commitment to providing an additional 300 planning officers to local authorities across the country. While this may not be sufficient to make a substantial difference, it does demonstrate a start from this government and a commitment to unlocking a slow and stalled system. The target of delivering 1.5 million homes in five years is ambitious, but achievable if all necessary steps are taken promptly and sustained pressure to change is maintained.
We await further announcements regarding the acceleration of housing development and infrastructure, along with a growth-focused National Planning Policy Framework that will prioritise Brownfield and grey belt land to meet housing targets.
In the energy sector, Rachel Reeves laid the political groundwork for the reintroduction of new on-shore wing programmes throughout the UK. However, as this announcement came from the Treasury rather than the Department for Energy Security and Net Zero, we await further details to see if there will be any financial contribution to supporting a significant policy shift.
Given that these schemes went through the planning process in 2023, there is hope that wind scheme developers will be submitting their new applications and moving forward in due course.
These policy announcements form part of a broader vision for the UK’s housing and infrastructure over the coming decades. The government appears to be signalling a move towards a more interventionist approach in the housing market, combined with a push for renewable energy and infrastructure development. This represents a significant shift from the more market-led approaches of recent years.
Public reception to these proposals is likely to be mixed. Recent polls have consistently shown housing affordability as a major concern for UK voters, particularly younger generations. The promise of more affordable homes and council housing is likely to be welcomed by many. However, the potential for increased development, particularly in greenbelt areas, may face opposition from some local communities.
The end of the onshore wind farm ban is likely to be popular with those concerned about climate change but may face resistance in areas where new wind farms are proposed.
The Chancellor’s speech represents a significant shift in government policy, with a clear focus on addressing the housing crisis, stimulating economic growth, and modernising the UK’s infrastructure.
The success of these initiatives will depend on effective coordination between various stakeholders, including local authorities, developers, and communities. It will also require substantial investment at a time when public finances are under pressure.
The government must navigate the delicate balance between development and environmental protection, ensuring that the drive for growth does not come at the expense of the UK’s natural heritage and climate commitments.
As these plans move forward, close examination will be needed to ensure they deliver on their promises without unintended consequences. The coming years will be critical as the government begins to translate these policy announcements into concrete actions, and their impact on both the housing market and the broader economy will be closely watched. The long-term success of these policies will ultimately be judged on whether they can deliver sustainable, affordable housing and infrastructure improvements that benefit all sections of society while meeting the UK’s environmental obligations.
Joanna heads up our social housing development team. Her expertise encompasses advising on social housing development transactions, from site assemblies to larger scale phased/portfolio sales and purchases.
Having acted for registered providers since 2001, Joanna’s expertise encompasses all aspects of affordable housing acquisitions, sales and development and is often the primary interface on multi-disciplinary projects involving cross-departmental working.
Navigating the complex landscape of providing housing that benefits both residents and landlords presents a significant challenge. With a team of experts possessing extensive knowledge in social housing, residential and commercial development, planning and construction, as well as expertise in housing management, employment, finance, funding, corporate, and commercial law, we are committed to assembling a dedicated advisory team for you. Our goal is to support you in achieving your objectives and addressing the current supply shortage.