‘Insisting on undeliverable levels of affordable housing makes policy makers feel good, but the result is zero build’

The new government has moved quickly to attempt to deliver on its plans to turbocharge house building. They had every reason to do so.

The last years of the Conservative government were not ones of which it can be proud. While constantly mouthing the commitment to building 300,000 homes a year, it lamentably failed to build anything like that number and Michael Gove’s cynical abandonment of the concept of a mandatory land supply obligation on local planning authorities was just the last straw.

When records showed that in 2023, more than 700,000 net migrants were legally admitted to the UK, it not only raised serious question about an economy clearly reliant on cheap imported labour but just added a further 200,000 homes to the shortage from which the country was already suffering.

Labour’s deputy leader Angela Rayner is in charge of the now renamed MHCLG and is clearly intending to make a difference. There is no doubting her sincerity. But there are grave doubts about the path she appears to be following and these are not marginal differences, nor are they political point scoring. There is a danger that in their obvious enthusiasm, the new government may make things a great deal more difficult for themselves than they realise.

Ministers are rightly currently consulting on plans to re-write the National Planning Policy Framework to force councils to identify enough land in local plans to meet their future housing needs. This is absolutely the right thing to do, and long overdue. They are right to demolish the idea that every inch of green belt should be sacrosanct. But when in the same breath they demand that 50% of those new homes have to be affordable – in other words sold closer to build cost than market price – they are killing their own goose. As Sadiq Khan has found out to Londoners’ cost, insisting on undeliverable levels of affordable housing may make the policy makers feel good, but the result is zero build.

Rayner has also talked about councils being given the power to compulsorily and cheaply buy up green belt land. Landowners who refuse to sell in parts of the country where there is perceived to be serious housing need could be ordered to sell land at a seriously lower price than it would be worth in a free market.

This is an appalling proposition. It is accepted in this country that there are cases where compulsory purchase by government in one form or another is justified. But it is a radical departure from that principle for government to deliberately take land away from its lawful owner for a price less than it is worth in the open market. It is in effect theft by government and as such completely intolerable. The industry should call this out quickly before the idea gains any traction.

Just as concerning is the new government’s apparent intention to build a great many of these new homes in the North. You would have expected the last administration to think that was a clever idea, but in reality, the only value of more building is for it to be in places where there is demand and that, of course, means in London and the South East. Yes, there is a case for some more capacity in some parts of the North, but that can only make sense where there is real demand. I grew up in Liverpool when its population was double what it currently is. It is good to see how under Steve Rotheram it has pulled itself up in recent years, but there is no actual shortage of housing.

It’s early days for the new government and hopefully some of these egregious mistakes can be corrected. If that doesn’t happen soon, they will be spending a great deal of time and money in court, while the lack of delivered homes becomes even more acute than it currently is.