Rachel Reeves used her second speech as chancellor to emphasise the urgency of housing development for the newly-elected government’s plans for the economy.
Overall, Rachel’s speech — which outlined how the government will boost development — was welcomed by the industry but now many are asking for the scope of the government’s work to be widened altogether.
Referring the previous government as creating a “graveyard of economic ambition”, Rachel said: “Nowhere is decisive reform needed more urgently than in our planning system.”
In its manifesto, the Labour Party pledged to deliver 1.5 million homes over the next few years with planning reform at the centre of this.
Labour’s landslide victory in the general election was positively received by the housing and development industry, and today this commitment was again praised.
Specific to housing, Reeves confirmed plans to reform the national planning framework and consult on a new growth-focused approach to planning before August. This would include the reintroduction of mandatory housing targets, and a new taskforce will be created to accelerate the use of stored housing sites in the UK.
Under Labour, Reeves said these plans would benefit from active involvement from her office and that of deputy prime minister Angela Rayner.
The former revealed both offices would write to local mayors to ensure any investment opportunities for development were brought to the government’s attention, as well as writing to planning authorities to “make it clear what is expected of them”.
Reeves added: “Antiquated planning system leaves too many important projects tied up for years and years in red tape before shovels even get in the ground
“I know there will be opposition and we must acknowledge that trade-offs always exist… but we will not succumb to the status quo that responds to the existence of trade-offs by always saying no and relegates national interest.”
industry professionals responded to the latest speech from Rachel Reeves
Paul Rickard, managing director at Pocket Living, welcomed the chancellor’s speech as a “welcome first step”, highlighting national housing targets will help motivate local authority decision-makers.
However, he added the scope of this work needs to be widened: “While significant, planning reform alone is not enough to deliver the homes we need and we look forward to a comprehensive agenda coming forward around public-private delivery partnerships, support for SME developers to get building again, and a strong focus on boosting the capacity of the construction sector.”
Likewise, Nick Sanderson, CEO at Audley Group, also welcomed the chancellor’s remarks but called for the government to do more.
Specifically, Nick said the newly-elected Labour party must acknowledge the role of specialist housing and expedite its delivery.
“Only then will we see more homes come to the market as people choose to downsize, leaving family homes available for those further down the ladder,” he said.
“It takes bravery to move away from promises of simply building more and instead focus on what needs to be built to make the most difference. I’d like to hear more from the government on taking that leap.”
Describing the change in tone as “refreshing”, Colin Brown, head of planning and development at Carter Jonas, said he wants to see more details about the treasury’s plans.
Pointing to the Labour Party’s pledge to deliver 1.5 million homes, Colin said this would require much more than just reforming the planning system.
“One cannot simply “turn the tap on” and expect houses to magically appear,” said Colin, who argued the government needs to pull multiple levers to secure transformative change.
“Central to this will be to grapple with the thorny issue of development in green belt locations and to also address the undoubted skills and labour shortages which have the potential to derail their programme.”
In agreement is James Dunn, head of operational real estate at abrdn. He too welcomed “any changes” to help combat the UK’s housing shortage, but said in the absence of “significant” direct development from the government more would be needed to build these 1.5 million homes.
“The government needs to go beyond the planning system and work in partnership and financially support the private sector to deliver significant volumes of housing across all tenures,” explained James.
“This extends beyond the bulk housebuilders to finding ways of enabling viable delivery of affordable and social housing.
“It should also embrace the growth of the professional rental sector that makes up a significant proportion of housing delivery in Europe and the US and channels new money from pension funds, insurers and retail investors in the UK housing system.”
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