Should the government restore housing targets?

Adam Wildsmith

February 8, 2023

Blue Beyond Deputy Director, Adam Wildsmith argues YES 

It’s just over two months since the government caved to scores of its own backbenchers and abolished its housing target, the only policy that mandates councils build new homes and punishes them for not doing so.

At the time Robert Colville, Director of the Centre for Policy Studies, warned in an article for The Sunday Times that this would result in reduced house building. Concerns cemented a fortnight ago in a Financial Times report which testified “housebuilders are concerned about changes to the planning system proposed by Rishi Sunak which will dilute development targets”. 

Taylor Wimpey’s chief executive Jennie Daly told the FT, “The proposed changes tip the balance?.?.?.?we’re going to be more hamstrung, and I don’t see any outcome other than a reduction in the overall number of homes planned for.”  

Many who support abolishing housing targets claim that the current system is too central, and ignorant to the concerns of local people. However, this view fails to understand that the current system of targets, complex though they may be, attempts to assess housing needs and constraints on housing supply in each local authority, and uses this to drive land release. And the system has been somewhat successful.

Though the government has so far failed to meet its 300,000 new homes per year target, house building prior to the pandemic reached the highest level in decades. Few are arguing that the present system is perfect, but it was a system nonetheless that began to deliver higher levels of construction.

Abolishing the target without any functional alternative is a recipe for disaster, destined to achieve reduced housing supply. As I wrote in the i newspaper last month, it is paradox in which the Conservatives are adopting “the principles of property-owning democracy while presiding over a collapse in home ownership”.   

An economy cannot survive, let alone thrive, without strong property ownership.    

The Nimbys have suggested cutting housing targets for greenfield sites and increasing them for brownfield. This would inevitably shift construction away from the rural South to the more urban Midlands and North.

While focussing on brownfield sites is a noble endeavour it will, like most of the proposed changes, result in reduced housing supply as brownfield targets are considerably more difficult to hit compared with greenfield. This is because brownfield spots are absurdly expensive to decontaminate and situated in undesirable locations where factories or former gas stations once stood.

Greenfield sites are comparatively cheaper to develop, requiring minimal land preparation or groundworks; free from the constraints of developing near or within an urban centre; and with the flexibility to expand for future growth. Our ambitions must move towards developing new areas, where people want to live, and away from reusing complex and undesirable former sites.  

 The Centre for Policy Studies has warned that an abolition of targets could see housing supply reduced by 20-40%. It’s important to consider the effect this could have on the economy. A downturn in supply of 20% could result in up to 400,000 job losses in the construction industry and an additional 400,000 in the wider economy.  

The IMF projects the UK will be the only advanced economy to have no growth this year, even falling behind sanctioned hit Russia. And so, it’s imperative to dispel with the immigration myth – the idea that lowering net-migration will suddenly alleviate the housing crisis.

Net migration has remained steady, hovering between 200,000-300,000 for the last two decades. Most who come to Britain, do so for reasons of study or work. And while net-migration reached record highs of 500,000 last year, this was largely because of humanitarian schemes to support refugees from Ukraine and Hong Kong. Even if all immigration into the United Kingdom was stopped, Britain would continue to suffer from a housing shortage.

Reducing immigration now would have a disastrous effect on our chances of achieving economic growth. Britain requires a strong housing market and sustained worker immigration if it is to depart from the pitiable growth levels of recent years. The problem is not immigration, but a failure in our housing policy.  

It is a fair and reasonable aspiration to seek a departure from the target-led housing system. But it is folly to destroy the current system without a credible and effective alternative. Until and unless the government reforms the planning system, targets must be restored as the only mechanism capable of compelling councils to construct new homes.  

GB News Producer, Sean Williamson argues NO…

The Government was right to drop the “compulsory” national target of building 300,000 homes per year and making it only an “advisory” target. In principle, the target was an ambitious aim to increase supply to the market but in reality, was destined to fail due to the target’s insensitivity to the nuanced needs of local communities and the government’s inability to reduce net migration.

The housing crisis is a nationwide issue but more ubiquitous depending on where you live. Department for Levelling up, Housing and Community and Census 2021 data shows that just over half of 309 local authorities increased the number of houses built compared to population growth. For example, North Norfolk (1.5%), Northumberland (1.4%) and Shropshire (5.7%) all increased in population in the last decade whilst the number of houses in those areas also increased from a range of 8–10.1% during the same period.  

However, Oxford, Manchester and Birmingham had the reverse effect, showing the housing crisis is far more prevalent in economically prosperous, dense cities that are offer great employment opportunities. The lack of effective planning makes it difficult to tackle demand in areas that need supply most.

Therefore, a “compulsory” national target of building 300,000 new homes across the country in areas such as Richmondshire or Wakefield wouldn’t necessarily solve the problem of a lack of housing in Oxford and Manchester. A far more focused, advisory target that considers the needs of areas such as the South-East of England and most cities, where there is a lack of housing or where housing affordability is ridiculously high, would be far more effective.

Another way to alleviate strain on the housing would be the government reducing net migration to the promised “tens of thousands”. Since 1998, net migration has never dropped below 100,000 with this year reaching a record 504,000. Naturally, this means large numbers of new homes are needed and demand is skyrocketing which also increases housing unaffordability. Thus, reducing net migration will certainly relieve the housing market from huge levels of demand.

Michael Gove’s £1.4 billion devolution deal for the North-East which features £17.4 million to accelerate the building of new homes on brown field space with a further £20 million to improve housing affordability is a much better approach. Devolving housebuilding to local authorities ensures houses are built where there is a need to be built whilst considering the concerns of local residents currently residing in those areas.

Those in opposition argue this is a victory for NIMBYs and devolving housebuilding to local authorities will lead to less homes being built, meaning the target of 300,000 will never be met. 

However, when was that target ever met? Successive Conservative governments have failed to reach their housebuilding targets. In the financial year ending to March 2022, there were 204,530 dwellings completed in the UK, considerably below the 300,000 target. For housebuilding to reach 300,000 per year whilst prioritising cities and the South-East of England, local authorities should adopt the proposal by CentreforCities. This entails a flexible zoning system that allows developers to build houses providing more easily they maintain conservation areas, National Parks etc. This means areas that need housing most can take advantage of quicker housebuilding whilst protecting the green belt. 

The Countryside Charity report found that 1.2 million homes could be built across 23,000 sites, yet only 45% of available housing units have been granted planning permission as well as 550,000 homes with planning permission continue to await development. Without doubt, there is room to build homes in those areas that need it.

Ultimately, the Government was right to scrap the “compulsory” target and replace it with an “advisory” one. If the Government reduces net migration and takes into account the needs of local communities whilst adopting more relaxed planning reform and utilising brown field spaces- it would be far more effective in delivering housebuilding targets. 


Written by Adam Wildsmith

Adam Wildsmith is Deputy Director at Blue Beyond and a Journalism student at Newcastle University

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