Pulling every lever But do housebuilding headwinds put PM's targets out of reach?

The numbers are stark: families on Bath and North East Somerset council’s social housing list face a 200-year wait for a four-bed property, and the latest figures show just over 10,000 social homes are built in England each year.

- Julia Kollewe

Tackling this crisis was a central element of Labour’s election promise to build 1.5m homes in five years. The government in July announced plans to spend £39bn building 300,000 affordable homes over a decade, 60% of them available for social rent.

But these ambitious targets appear to be drifting out of reach. In London, housebuilding of all kinds has pretty much stalled, prompting the housing secretary, Steve Reed, and the mayor, Sadiq Khan, to announce a controversial package last week that cuts from 35% to 20% the proportion of affordable units a site needs in order for it to be fast-tracked.

The London measures include £322m to set up a City Hall developer investment fund and low-cost loans through the new National Housing Bank. It comes on top of the government’s wider shakeup of planning law to try to speed up construction and boost the economy.

Nevertheless, despite such efforts to pull every lever, progress towards targets remains painfully slow. The number of new homes delivered in England was 231,300 in the year to September. To hit the 1.5m goal, the UK’s annual rate needs to be at least 300,000, a pace not achieved since 1970.

'A perfect storm'

Khan, who grew up in a council flat, sums up the problem: “There is now a perfect storm facing housebuilding ... due to a combination of high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit.” Added to that are new regulations and a shortage of skilled workers.

These problems are magnified in the social housing sector, where housebuilder profits are lower. Shelter and the National Housing Federation have calculated that 90,000 social homes a year are needed in England.