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Advisory local housing targets unlikely to deliver on Government’s 300,000 new homes objective, say MPs

14 July 2023

It is difficult to see how the Government will achieve its target of 300,000 new homes per year by the mid-2020s in England if mandatory local housing targets are dropped, says the cross-party Levelling Up, Housing and Communities (LUHC) Committee in a report published today (Friday).

The report, which examines the Government’s planning reform proposals, finds that the Government has 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 1 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 Reforms to national planning policy report is critical of the stop-start reform on national planning policy over several years, which it says has caused uncertainty for local authorities and planners, delayed local plans, and slowed new house building.

Chair comment

Clive Betts, Chair of the Levelling Up, Housing and Communities (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 asserts the importance of ensuring affordable housing forms a substantial proportion of the 300,000 new homes delivered each year. The report calls 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 highlights the significant resource challenges faced by local council planning departments and criticises 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 finds. The report highlights that the standard method is based on 2014-based housing projections, that it focusses on housebuilding in areas where economic activity is already high, and that it includes an arbitrary 35% uplift for urban centres. The Committee calls on the Government to adopt a revised standard method which take accounts of future local need, encourages regeneration across the country, and applies fairly to all local authorities.

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