Our planning system isn’t working. England is on course to deliver fewer than 200,000 homes this year. The independent Centre for Cities reckons 442,000 homes per year is what’s needed to close the 4 million home backlog built up over seven decades of the Town and Country Planning Act.
Today, Angela Rayner set out her plans to change this and get Britain Building again.
At the heart of her plans are targets. England’s national target will rise from 300,000 to 370,000 per year. And the targets will have teeth again. The Conservatives’ decision to scrap targets to appease (now former) backbenchers like Theresa Villiers and Bob Seely has been reversed. Rayner has beefed-up the presumption in favour of sustainable development and threatened to rewrite local plans that aren’t up to scratch.
Importantly, the new housing targets will be based on a new method. Rayner announced they will factor in unaffordability of homes compared to average incomes when deciding where to increase housing targets.
The previous algorithm relied on population growth forecasts. The result was it arbitrarily spat out low housing targets in expensive areas because high house prices tend to be the most effective way of keeping out new arrivals. Factoring in affordability will mean that leafier well-heeled suburban and rural areas will need to pick up more of the slack.
However it is concerning that Rayner has ditched the last Government’s 35% urban uplift, which raised targets in the UK’s 20 largest urban areas.
London’s housing target has been cut from 100,000 to 80,000 as a result. This is unfortunate because Britain’s housing shortage is most acute in the capital. It is more expensive to rent a one bed flat in London than a three bed house in any other region. House prices are now 12.5 times higher than the average income in London, much higher than the five times average income that the Office for National Statistics deems affordable.
100,000 homes in London may seem like an unreachable target, which Rayner alluded to. After all, London hasn’t built more than 35,000 homes in a year since the 1930s.
Yet cities around the world are proving that it is possible to build that many homes, and reap the rewards of fixing a broken housing system. Austin, Texas (population 2.4 million) authorised 42,364 homes in 2022. Per capita, that’s the equivalent of London building 160,000 homes. Last year, rents in Austin fell by 7%, with residents reporting being offered rent decreases if they renewed their lease.
Auckland (population 1.7m) consented 21,400 homes in 2022, the equivalent of 116,000 homes in London. New Zealand as a whole consented over 50,000 homes in 2022. Per capita that would be over 600,000 in the UK. The Kiwis were able to build these homes by updating planning rules to automatically approve any building up to six-storeys high near city centres and rapid transit stops. Economists assess that rents were a third lower in Auckland than they otherwise would have been as a result of an earlier similar policy. A one third fall in London’s rents would save an average couple £6,000 a year. When Croydon adopted a similar policy, it led to a house building boom, and a 20% fall in the cost of buying a home.
The Tokyo Metropolis area (population 13.5m in 2015) averaged building 155,000 homes per year from 1995 to 2015. That’s the equivalent of London building 103,000 homes every year for two decades. Building 100,000 homes in London is possible, and we need to learn from other cities and countries to deliver the homes that British people desperately need.
One of the ways to build those homes is re-looking at greenbelt land, which Rayner’s speech rightly focused on as a priority. A lot of greenbelt land is hardly green as it is scrubland or carparks. There’s a disused service station in Tottenham, only a five minute walk from Tottenham Hale station, which can’t be redeveloped as it’s currently on greenbelt land.
In total, there’s 3,616 hectares of land within a 10 minute walk of an existing tube, rail, or tram station in London where housebuilding is currently banned. That’s 25 times larger than Hyde Park. Just building on this already well connected land could unlock up to 350,000 homes if we built at a gentle density of new flats and houses – a quarter of Labour’s housing target for the entire parliament.
Labour have correctly identified how Britain’s housing shortage is holding back economic growth, and the means to fix it, reforming the planning system. Yet they could and should be bolder in London. Building 100,000 homes per year in London is not only achievable, it’s necessary.
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