Patrick Mooney says that the number of new homes needed across the North and Midlands to deliver the Government’s ‘levelling up’ agenda runs to hundreds of thousands, every year.

The Government’s housebuilding policies have been ‘on hold’ ever since the Chesham and Amersham by-election in June, when the Lib Dems surprisingly overturned a huge Conservative majority, with HS2 and a more permissive approach towards housebuilding in affluent areas of the South East being blamed in equal measure.

Responding to suggestions that his party’s housebuilding plans had led to the by-election defeat, the Prime Minister said there had been a “wilful misunderstanding about the planning reforms” adding that the Government wanted to develop brownfield sites rather than “build all over the countryside.”

Three months later we saw a cabinet reshuffle with Michael Gove replacing Robert Jenrick as Housing Secretary, accompanied by lots of briefing that the long awaited planning reforms to deliver a step change in housebuilding were being reviewed. Protests from Conservative MPs in the Home Counties had clearly hit the mark despite Boris Johnson’s protests to the contrary.

Since then the housing sector has been patiently waiting to see the details of what has changed and what has not. This is of huge importance given that we are only a few years away from the Government’s target date for delivering 300,000 new homes a year. There is a huge amount of lobbying going on right now, despite the public furore over the work of lobbyists and payments to MPs.

Among those hoping to influence Michael Gove is the Local Government Association which represents over 320 councils across England. It is calling for local authorities to be given the powers and funding to build as many as 100,000 new social homes for rent each year. The LGA says this would not only deliver a third of the Government’s annual housing target, but it would also shorten council housing waiting lists, reduce homelessness and cut carbon emissions, while delivering a £24.5bn boost to the economy over the next 30 years. 

Waiting lists could double 

To back up its case, the LGA is warning Ministers that one in 10 households currently in need of housing are stuck on councils’ waiting lists for over five years as a result of the chronic shortage of affordable homes. It also claims that as a result of the pandemic, council housing waiting lists could almost double next year to as many as 2.1 million households, due to the impact of Covid-related support schemes winding down, and a potential increase in homelessness.

Councillor David Renard, the LGA’s housing spokesman, commented: “Now is the time to reverse the decline in council housing over the past few decades. The benefits are clear – a programme of 100,000 social homes a year would shorten council housing waiting lists, reduce homelessness and cut carbon emissions, while delivering a multi-billion pound long-term boost to the economy.”

The LGA claims the delivery of 100,000 new social homes a year would also bring a raft of significant environmental benefits that would support the country’s net zero ambitions. For instance a family moving from an old, poorly insulated and fossil-fuel heated home into a modern home with a heat pump could save up to £500 a year.

For 1.6 million households, it says social rent is the most appropriate form of housing, as many of these families are either not ready or choose not to buy, while social housing gives these families the security and stability of a decent home. They also have a route into owning their own home through the Right to Buy, if and when they are ready to commit to a property purchase.

Meanwhile as civil servants work through the final changes to the draft planning reforms, some of the leading figures in UK housing have advised Ministers that a “radical rethink” on housing delivery is needed if the Government is to succeed in levelling up the country. They point towards new research which reveals that over the next 20 years as many as 140,000 new homes will be required annually in the North and Midlands.

Help with levelling up 

The Building Back Britain Commission – an independent group comprising of business leaders from Barratt Developments, Legal & General, Mace, NHBC, The Riverside Group and Thakeham – has published a report which highlights how the Government’s plans to level up the country will lead to a significant increase in demand for housing outside London and the south east, as well as reducing pressure on areas with a current high demand, such as the Home Counties.

The Commission’s research assumes that over the next two decades employment levels will increase in areas the Government has identified as being most in need of levelling up, and which currently have rates below the national average. The jobs boost which will result from plans to boost regional growth, will lead to increased demand for housing (of different tenure types) for people who are already living in these areas, as well as those who will move to these towns and cities in search of new jobs.

The Commission’s key findings include:

• Over the next 20 years around 86,000 to 140,000 homes will be needed every year in the areas defined as most in need of levelling up – a third of this will be ‘affordable housing’;

• This is around an additional 13,000 to 67,000 homes every year compared to the Government’s current estimates for those areas;

•Birmingham would require the largest increase in new homes. Currently, 4,829 homes a year have been earmarked under the standard way the Government assesses need. This would rise to 12,430 homes a year under a scenario based on future growth; and

• Manchester requires the second largest increase in new homes. Using the present housing assessment, 3,527 homes are needed a year. This more than doubles to 7,469 homes a year based on future growth.

The Building Back Britain Commission used the report to set out a Housing Strategy which includes a radical rethink in the way that housing demand is calculated to a model which shifts from being based on historical growth to a new ‘levelling up’ model of future need. 

Their report also argues for the creation of at least one ‘Construction Cluster’ in every region of the UK by 2030 to foster innovation and help train up workers in the latest methods of construction, with the first of these located in Leeds. They also want to see at least 75,000 high quality MMC homes built a year by 2030.

Terrie Alafat, who chairs the Building Back Britain Commission, said: “Our results have profound implications for policy. The Government’s current housing strategy simply does not fit the levelling up agenda. It is based on past growth trends and will not be dynamic enough to meet future demand. The increase in demand in levelling up areas should reduce the pressure for new homes in other areas that are already economically developed.”

We should hear shortly from Michael Gove on which direction he is likely to take. I suspect the Building Back Britain Commission may have more reason to celebrate than members of the LGA.