Government policies could lead to dramatic drop in new homes, predict LPDF and HBF

The number of new homes built each year in England could fall to the lowest level since World War II due to a “perfect storm” of government policies and higher mortgage rates, Land Promoters and Developers Federation (LPDF) and the Home Builders Federation (HBF) have predicted.

According to a recent report prepared by Lichfields on behalf of the two firms, the proposed National Planning Policy Framework (NPPF) revisions on local plans and housing land will result in approximately 77,000 fewer new homes per year. 

The research also concluded that the government environmental rules to guard against pollution of rivers and waterways could further cut supply by 15,000 to 41,000 homes a year.

The report data predicts that by 2030 — compared to what would happen by maintaining the current rate of housebuilding — the cut in supply caused by the proposed changes to the NPPF will lead to:

  • a 17,500 shortfall in new affordable homes each year
  • £18,400 added to the price buyers pay for the average home
  • £8,700 extra savings needed for a typical deposit by first-time buyers
  • 386,000 fewer jobs directly or indirectly supported by housebuilding

LPDF’s chairman Paul Brocklehurst said: “There is an acute housing crisis that weakens the economy and impacts on the life chances of young people and families; yet the proposed changes to planning policy will alone result in around 77,000 fewer new homes per year being built in England, making a bad situation worse. 

“Not only will the proposed NPPF changes impact on the economy, housing delivery and affordable housing — shattering the dreams of many young people and families — they do nothing to correct the issues of undersupply in the delivery of land for employment uses, key if we are to compete on the global stage. 

“Now is the time to deliver meaningful, positive reforms which will embed growth into our economy.

“The government still has sufficient time through the consultation process to reconsider its position and move away from changes which, in the context of its 300,000 homes per year aspiration, are frankly irrational, as highlighted by the Lichfields research. 

“At a time when the industry is contending with the impact of higher interest rates on demand, leading to slower sales rates per outlet, the industry is likely to need more planning consents, not less to deliver the volumes required by policy makers.  

“The government should therefore be taking positive, affirmative and immediate action to amend planning policy to ensure that we build the new homes and affordable homes that this country so desperately needs.”

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