Put builders on a war footing to deliver 1.5 million new homes within five years, industry experts say
British housebuilders must be put ‘on war footing’ if the industry is to have any hope of developing the 1.5 million new homes Labor is targeting within five years, industry experts say.
Obstacles to meeting Keir Starmer’s ‘extremely optimistic’ target include staff shortages, high interest rates, small construction companies going bankrupt and lack of materials.
Labor has promised to tear up the ‘broken’ planning system in the biggest rules shake-up in a generation so that 300,000 homes can be built every year in this Parliament.
Deputy Prime Minister Angela Rayner has unveiled plans to allow more homes to be built on green belt land and impose mandatory targets on councils. But the overhaul faced a backlash from campaigners and local authorities, who said the figures were not achievable.
And industry experts say planning rules aren’t the only major challenge.
The British housing sector has had a turbulent year as high interest rates put buyers off. Stocks across the sector have tumbled in recent months as hopes for a construction boom fade.
Labor wants 300,000 homes built every year in this Parliament
Bovis Homes owner Vistry – who issued a profit warning for the third time in three months on Christmas Eve after a major accounting blunder – is more than 60% lower. And luxury developer Octagon sounded alarm bells last month when the 45-year-old company filed an administrative order.
Richard Donnell, head of research at property website Zoopla, said: ‘When we don’t build enough houses, people are quick to blame the planning system. That’s not the only thing we have to sort out.’
Ian Fletcher, chief executive of the British Property Federation, said: ‘I support the government’s ambitious policies. But I am also realistic about the challenges. It takes a housing sector on a war footing to achieve those kinds of figures.
‘Everything has to be overhauled when it comes to the government’s approach to planning, construction skills, materials, property rights – you have to be a champion of private renting, owning and social renting.’
Paul Rickard, head of London developer Pocket Living, said the declining number of small and medium-sized housebuilders would jeopardize the target of 1.5 million homes.
‘This sector is still dying. The government will need continued and dedicated focus to save the MSME sector,” he said. “If you do all those things, you might have a good chance of hitting 5 feet.”
In 1988, small and medium-sized businesses built 39% of new homes, a figure that has fallen to 10%. In September, construction companies were responsible for 17 percent of bankruptcies in England and Wales, making it the worst hit sector.
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