300,000 new homes a year: is Labour’s housing target achievable?

The UK housing crisis has been an ongoing issue for several years. Keir Starmer has promised since ‘day one’ that Labour will address the matter and meet a target of building 1.5 million homes in the next five years: 300,000 homes per year.

This new housing goal represents a significant increase compared to the previous Conservative party government, which only managed to build an average of 234,000 new homes annually. Keir Starmer has pledged to get Britain building again and this promise is a step in the right direction, helping reduce house prices and population density by increasing the amount of housing available.

Why does the UK need more homes?

For a long, consecutive period, the number of affordable homes built for the public has dropped dramatically. This has resulted in many households living in unsuitable accommodation, with damp and mould growth, structural defects and poor insulation creating a persistent problem in UK housing supply. With a growing population, the number of households in the UK is predicted to rise rapidly. Couple this with social changes that are seeing higher rates of divorce and more single people living alone, we are seeing an increased demand for new homes.

Due to the high demand, UK property prices have risen, leaving many trapped in the rental market and resulting in first-time buyers struggling to get on the property ladder. This has created a vicious cycle where housing has become more unaffordable, money more difficult to save and an all-time high demand for property.

What is Labour’s five-year plan?

In the UK, finding sites for housing development can be a challenging ordeal due to protected and pre-constructed land, which creates limited options. So, how can the Labour Party deliver this promise?

The National Planning Policy Framework sets out the government’s planning system. Within this policy, Labour has issued mandatory housing targets for the next five years and loosened restrictions for development on brownfield and greenfield sites, creating more land accessible for housing development. To address the shortage of affordable housing, any greenfield site development must incorporate 50% affordable property, while any housing projects developed on brownfield sites must adhere to a 10% affordable housing requirement.

Labour intends to prioritise building on brownfield sites rather than migrating large housing developments into the countryside. But Labour’s promise will not be delivered with brownfield site development alone. Labour plans to build on ‘grey belt’ land – a new category of greenfield sites with little to no historical significance or agricultural activity – the ‘ugly’ green belt land. These sites now open for development allow for an increase in housing where it is most needed, as the past green belt restrictions stagnated development in these areas over the years.

Will Labour hit its five-year target?

In the past, the government supplied a large portion of property, delivering up to 80% of new homes. However, since the 1980s, the social housing supply from the government has significantly decreased, resulting in the private sector overtaking the market. This creates issues with Labour meeting its five-year target to build 1.5 million homes due to private housing developers building new homes to maximise profits rather than meeting the demand. Labour will need to partner up with private developers to be successful in meeting its new home target, supporting smaller housebuilders in more rural locations rather than focusing on the larger developers who are too apprehensive to overbuild and flood the market.

There are also ongoing efforts to restore the level of public investment in housing. Schemes like Right to Buy, which allows tenants in social housing to buy the property they are living in for a large, discounted price, are an opportunity to help more people get on the ladder. Tapping into this scheme will be critical to meeting these ambitious goals, creating a pot of money for the government to independently build more social housing and rely less on private developers.

How will this impact the housing development industry?

The five-year plan Labour has announced will have several impacts on the industry, potentially shocking the supply chain and making property investors uninterested. With the goal of 300,000 new homes per year, this could potentially lead to a shortage of labour and materials within the house building industry due to this target being the largest increase of social housebuilding in a generation.

Today, the government delivers a fraction of new homes to the market, but Labour’s promise to build 300,000 new homes per year will provide stagnant areas with new development and result in a more inclusive, stable UK housing market.

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