Housing should be at the centre of the Labour government’s plans.
This is unsurprising given the economic uncertainty and history shows that housing tends to lead the wider economy both into and out of downturns.
We have recently seen small rises in house prices and mortgage approval rates to prove there are some green shoots, but without some major changes it doesn’t look like we can build our way out of this recession.
We have a fundamental issue of a lack of homes for rent and for sale in the UK, which has created a major affordability problem with a knock-on effect on GDP. Housing has been a major social pressure in the UK for decades and we have seen no tangible actions to address the issue for years.
We believe that a radical, yet credible, plan is needed to convince markets that Labour can tackle the issue with a long-term plan, not a number of short-term fixes.
A suggested target of 300,000 homes per year had been the target for the previous government since 2004 and it was not been met once.
France by contrast has built nearly twice as many homes as the UK since 1970 despite having comparable population growth. The shortfall in fact means, according to Capital Economics, that we now need 385,000 new homes a year.
The root of this problem has been four-fold:
- a reliance solely on the major housebuilders;
- a politically aligned planning system that deters councils from being pro-development;
- a net loss of social housing of 200,000 homes in the past decade as a result of demolition or sale through Right to Buy; and
- a loss of construction workers post-Brexit.
Without fixing the roots of this supply problem we will not solve the affordability crisis we are currently facing.
Get SME housebuilders building again
SME housebuilders can play a major part in meeting our housebuilding needs. Before the 2008 financial crash, small developers built 40 per cent of our homes; now it is just 15 per cent.
Smaller developments and smaller companies are often better received in the local area, which helps with objections. But, we would urge Labour to provide incentives so they can access opportunities. One example could be making local authorities allocate a percentage of their land in small plots to create a supply-side push.
In addition, developers could be awarded fully permissive planning permission for brownfield sites of less than 2.5 hectares. Government-backed equity schemes would also give these smaller firms the balance sheets needed for projects.
It would also be advisable to improve the public perception of the major housebuilders who are often very ill-received.
Boost skilled labour in construction
Finding good contractors has become very difficult; many now work in small teams, which makes development projects much harder to manage.
We need the new government to focus its efforts on creating more homegrown jobs as we can’t rely on overseas workers.
To raise productivity, more work needs to be done off-site in factories, which would attract more women and young people into the sector and reduce construction costs and build times.
