Labour Housing Targets Rise to 1.85 Million

On Tuesday 30th July, Labour announced its pledge to increase housing targets from 1.5 million to 1.85 million over the next five years. This means that, if these targets are met, 370,000 homes will be constructed per year instead of 300,000, representing an annual increase of 70,000 homes across the UK.

Deputy Prime Minister Angela Rayner announced the boost to housing targets during a House of Commons debate, stating that the boost to targets was necessary as the Labour Party had just “inherited the most acute housing crisis in living memory.” She emphasized the need for significant changes in the way the UK builds homes to meet these ambitious targets. But what have the party pledged to do, and how will they meet their ambitious targets?

How Will The New Labour Housing Targets Be Met?

Changes to Local Targets

Firstly, there will be an overhaul of how Labour housing targets are calculated, including scrapping the target 35% uplift for the largest 20 urban areas as introduced by the Tories. For example, the annual quota for new homes in London will now decrease from 99,000 to 80,000. The new formula for calculating housing targets will be based less on household projections and more on existing housing stock, adjusted by affordability criteria. Meanwhile, quotas for 65 other areas across the country will more than double under new planning guidelines, with a particular focus on northern England and rural Conservative heartlands.

Affordable New Homes

During her announcement to the House of Commons, Deputy Prime Minister Rayner stated that “where land in the green belt is developed, new golden rules will require the provision of 50% affordable housing.” In essence, this means that at least half of the new homes constructed on green belt land under the new Labour government will have to meet their standards of affordability.

Rayner also promised more flexibility in the current affordable homes program and confirmed that details of future government investment in social and affordable housing will be revealed at the next spending review. This is expected to support the largest increase in affordable housebuilding in a generation, ensuring that a large portion of new homes constructed across the UK meet the demand for affordability.

Amending Planning Reform

Labour aims to boost housing production by reforming the planning system to remove barriers to construction. This includes giving metro mayors the power to carry out strategic planning across local authority boundaries to better plan for economic growth. Homebuilders will also be able to bring forward proposals on grey belt land where local authorities do not have up-to-date plans or fail to meet local Labour housing targets.

One major change to planning reform is that councils will be stripped of their ability to resist developments based on character objections. Under Labour’s plans, councils will not be able to deny the construction of new homes on the basis that they are not ‘beautiful’. At present, “all new developments must meet local standards of beauty, quality and design” – however, Rayner’s announcement seeks to reverse this necessity. Although the government has still stated that they “will build homes at scale, and they will be beautiful”, they have also made clear that aesthetics should not be a viable block to the construction of new homes across the UK.

Building on Grey Belt Land

Next, Labour has pledged to prioritize the use of brownfield and grey belt land for new housing developments, with a focus on a ‘brownfield first’ approach. Brownfield land refers to previously developed plots that are no longer in use, while grey belt land, a new term coined by Labour, refers to lower-quality greenbelt plots largely on the outskirts of large cities.

Although Labour has not ruled out constructing homes on greenbelt sites, they have promised to mitigate the environmental impact of constructing on greenbelt plots by enhancing existing green spaces and creating new ones for local communities.

Creating New Labour Towns

Labour’s manifesto referenced the creation of ‘new Labour towns,’ with a dedicated taskforce now appointed to bring these new communities to life. Two experts will help design new communities across the UK, each set to house 10,000 or more residents.

Some new communities will be separate from existing towns, while others will be urban extensions or regeneration schemes. These new towns will follow a ‘new towns code’ to ensure they are well-connected, have the necessary infrastructure and jobs, and meet the government’s stringent sustainability targets. Information on the locations of these new towns is expected by the end of 2024.

What Does This Mean for Property Investors?

If Labour meets its target of building 1.85 million new homes over the next five years, we at Centrick Invest believe this will be highly beneficial for property investors across the UK. The changes to local planning aim to build the right properties in the right places, addressing the specific needs of tenants and buyers in different towns and cities rather than applying blanket targets across the UK. This will ensure that property investors not only have access to a greater selection of investment properties to diversify their portfolio, but targetted construction efforts across regions in dire need of new homes will ensure there is viable tenant demand for these new properties. Furthermore, the expedited construction of new homes presents even more opportunities for investors to purchase units in upcoming ‘new Labour towns’ which we anticipate will be immensely popular thanks to the government’s focus on sustainability, infrastructure and opportunity in these new locations.

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