England’s housing supply set to plummet to lowest level in decades

The Home Builders Federation (HBF) has warned housing building in England is set to fall to its lowest level since the second world war due to planning policy changes.

Government policies threaten to slash housing supply in England, resulting in the number of homes falling below 120,000 annually – less than half of the government’s target.

Towards the end of last year the Department for Levelling Up, Housing and Communities published a consultation on the Buildings Safety Levy, through which the government plans to push ahead with a £3bn levy that will be spread over 10 years to pay for the remediation of ‘orphan’ buildings where no owner can be traced.

The department said the plan was on top of £5.1bn already committed by the government to paying to solve post-Grenfell fire safety problems in existing flat blocks, but the industry said the new levy would be in addition to more than £4bn of additional costs already levied upon it.

However, housebuilders have consistently argued that they have paid to repair their own buildings via the £2bn cladding pledge, as well as having contributed an estimated £2bn to £3bn via the Residential Property Developer Tax and shouldn’t have to pay any more money.

Due to forking out billions to support this scheme, the HBF has warned the government won’t be able to afford to create new homes, exacerbating the country’s housing crisis and making it harder than at any point in recent history to become a homeowner.

Executive Chairman of the NBF, Stewart Baseley, said: ‘The increasingly anti-development and anti-business policy environment poses a real threat to housebuilding and is inevitably at the forefront of minds when investment decisions are being made.

‘As we try to tackle the housing crisis during a recession, with a tighter mortgage availability and no government scheme to assist buyers purchase new builds for the first time in decades, short-term political decisions to appease backbenchers seriously threaten confidence.’

However, a spokesperson from the Department of Levelling Up, Housing and Communities, said: ‘We do not accept this analysis. We remain committed to delivering 300,000 new homes per year remains and we are investing £11.5bn to build the affordable, quality homes this country needs.’

Following this, the predicted drop in houses comes after years of rising housing supply spurred in part by the Conservative-Liberal Democrat coalition’s adoption in 2012 of the national planning policy framework (NPPF), which was designed to stop councils blocking large numbers of new developments. As a result, net new housing supply doubled over the following seven years.

However, in 2022, Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, came under pressure to make changes to the NPPF in an attempt to make it easier for local authorities to refuse planning permission.

Against this backdrop, in December Gove announced he would drop the government’s compulsory target of building 300,000 new homes each year, making it voluntary instead. This came despite the Conservatives pledging in its 2019 manifesto that the compulsory target was ‘central’ to the levelling up mission.

Photo by Randy Fath and Josh Olalde