Are we on the cusp of a housebuilding boom?

20 Mar 2024, 11:58

By Joe Holden, Senior Consultant

Housing – particularly a shortage of supply – is one of the most significant issues facing Britain as we head into the upcoming General Election this year.

Indeed, one recent poll found 81% of voters agreeing that “the housing market is broken”. On a national level, there is overwhelming support for a major expansion in housing supply, but people tend to be less enthusiastic when it comes to building in their own locality.

Recognising demand for housing reform, the Labour Party is beginning to understand the potential electoral benefits of a pro-housebuilding platform. Buoyed by a 20-point lead in the polls, they are now making bold noises on housebuilding. From Keir Starmer professing his ‘YIMBYism’, to Angela Rayner pledging to reform the planning system, things are heading in a new direction.

The proportion of renters vs homeowners in the electorate has also increased since the Conservatives have been in power. Indeed, 26% of 18-24 year olds now cite housing as one of the most important issues facing the country. Labour is hoping to capitalise on voter demand for housing reform in the quest for electoral gain.

We can also expect the Tories to be punished in coastal areas and tourist hotspots, where affordable housing has increasingly been decimated by second homes and holiday lets. For example, the risk to traditional Conservative seats in the South West, where housing supply issues are prevalent, will worry Conservative Campaign Headquarters (CCHQ). Labour will be particularly eyeing up Camborne and Redruth (George Eustice) and Truro and Falmouth (Cherilyn Mackrory), which have never turned red.

Keir Starmer has also spoken openly about building on the greenbelt, with Labour prepared to take “tough decisions” and “back the builders, not the blockers”, something many Conservative MPs have been too nervous to contemplate in fear of upsetting core voters.

Starmer has pledged to boost home ownership and build 1.5 million homes in the first five years of a Labour Government, underpinned by fundamental planning reform, which would unleash the country’s building potential. This sits in contrast to the Conservative Party, which has a similar target, but is some distance away from achieving it and without the necessary planning reform in place.

Starmer’s promise has been music to the ears of many in the housebuilding industry, who have been tearing their hair out at the lack of meaningful action on new homes by the Conservatives.

As Labour continues to build out the specifics of its housebuilding policy agenda, there is a valuable opportunity for the industry to help educate the party about the challenges they face and help to shape how a Labour Government could deliver for voters on housing and planning over the long-term.

Labour’s housing policy development is being driven by influential Shadow Housing Minister Matthew Pennycook, who has developed a reputation as a trusted and focused operator. He acknowledges the scale of the housing crisis, the potential of housebuilding to drive economic growth, and is willing to have substantive discussions with the industry on Labour’s approach to this issue.

However, despite the positive signs from Labour regarding their approach to housebuilding and the planning system, there is still uncertainty as to how ambitious the next government’s plans on this will be.

For example, we have recently seen Labour shun substantive proposals by the Government to unlock housebuilding through net neutrality reforms in favour of appearing tough on environmental standards.

Equally, as the Starmer team is acutely aware, it is still very plausible that Labour will fall short of the majority that polls have been predicting, such is the monumental swing required. This uncertainty is compounded by the complex landscape of boundary changes. In such circumstances, the Liberal Democrats could again play the role of kingmakers, this time horse trading with Labour on the terms for enabling a Labour Government. Amid the list of policy priorities being negotiated, it’s unclear whether the progressive parties would find common ground to reconcile housing and environmental pressures.

Overall, though, it does look as if a significant policy change could be on the horizon for housebuilding in this country. This can’t be taken for granted given the vulnerability of the housing debate to strong emotional responses from voters, but things are certainly on the right track.