Advisory housing targets unlikely to deliver 300,000 new homes a year, warn MPs

The government will struggle to achieve its target of 300,000 new homes per year by the mid-2020s in England if mandatory local housing targets are dropped, a cross-party committee of MPs has warned.

A report on the government’s planning reform proposals by the Levelling Up, Housing and Communities (LUHC) Committee said that the government had not provided sufficient evidence to demonstrate how the policy of scrapping mandatory local housing targets will directly lead to more housebuilding.

While the government is on track to deliver a million new homes over the course of this parliament, it is not forecast to deliver 300,000 net new homes per year by the mid-2020s.

In December 2022, the government announced proposals to move to advisory rather than mandatory housing targets for local plans.

The LUHC Committee’s report criticised the stop-start reform on national planning policy over several years, which it said had caused uncertainty for local authorities and planners, delayed local plans, and slowed new house building.

On the topic of slowing housing progress in England, last week the Mayor of London announced he wanted the government to re-think it’s plans about introducing a new infrastructure levy as he claims developers in the capital city will be unable to keep up with costs. Not only will this slow down the number of homes being built, but it will also interfere with plans to build essential new buildings such as schools and health centres. 

Clive Betts, chair of the LUHC Committee, said: ‘We have a national shortage of housing in England and there’s evidence the government’s latest shake-up of planning rules is already having a damaging impact on efforts to increase the building of new homes.

‘People are facing rising housing costs. Housing affordability is a major issue. For our economy and for communities across the country, it’s crucial the government takes urgent action to encourage the building of more homes. Without urgent action, the government will fail achieve its national housing target of building 300,000 net new homes per year by the mid-2020s.

‘Planning consultants say annual housebuilding will go down to around 150,000 a year under the government’s proposed policy reforms. The prospect of a major hit to the building of new homes resulting from the government’s planning rule changes is deeply concerning, especially for people wanting to get on the housing ladder, families eager to move home, and communities crying out for affordable places to live.’

The report emphasised the importance of ensuring affordable housing forms a substantial proportion of the 300,000 new homes delivered each year, and called on the government to give greater importance in planning for social rent homes and for the 300,000 objective to include a target for 90,000 social rent homes per year.

The report highlighted the significant resource challenges faced by local council planning departments and criticised the government’s failure to set out a comprehensive resources and skills strategy for the planning sector.

The standard method of calculating housing need is not fit for purpose, the report additionally found. The standard method is based on 2014-based housing projections, focusses on housebuilding in areas where economic activity is already high, and includes an arbitrary 35 percent uplift for urban centres. The Committee called on the government to adopt a revised standard method which takes account of future local need, encourages regeneration across the country, and applies fairly to all local authorities.

Image: Matt Seymour