Labour have their feet well and truly under the table at Westminster and since their Annual Conference in September, are starting to roll out some of the proposals outlined in their ‘Change’ manifesto. High on the agenda is housing, where Keir Starmer made some pretty ambitious promises.
So how has the Labour party proposed to address the housing crisis and have they made any headway in pushing these reforms through? More importantly, what impact will they have on the construction industry?
Labour’s housing promises
Labour has committed to building 1.5 million new homes by the next parliament as part of their broader goal of ‘Getting Britain building again.’ Achieving this ambitious target will have a profound effect on the construction industry which has been hit hard by low performance and low productivity in recent years.
But how does Labour plan to deliver such a large number of homes, especially when the previous government continually fell short of their housing targets? Outlined in their manifesto is number of ways they hope to achieve this:
- Revise the National Policy Planning Framework – Reintroduce mandatory targets for councils, ensuring local authorities have up to date plans and providing an additional 300 planning officers to speed up planning applications.
- Green belt reform – Unlocking more land for development while safeguarding genuine green spaces by adopting a brownfield-first approach. Prioritising building on developed land that is currently abandoned or underutilised. Additionally, Labour will release low-quality green spaces, known as ‘grey land’.
- Towns of the Future – Sites will be revealed by the end of the governments first year. These New Towns will be funded by the private sector, allocating 40% of housing to affordable homes.
- Reform Compulsory Purchase Order compensation – Enabling local councils to buy land at a more affordable price, these orders will provide a fairer compensation scheme. Landowners will be offered a current rather than inflated price based on the prospect of planning permission.
Labour’s housing policies primarily focus on building more houses, but they have also committed to raising the energy efficiency standards of both private and socially rented homes. Awaabs Law is due to be enacted by the Autumn, requiring a timely response from landlords to hazardous complaints after the death of a 2 -year old boy who lived in a mould infested social home. Further, Labour want to ensure both social and private rented homes achieve an EPC rating of C or above from 2030.
Both these objectives could have a positive effect on the construction industry driving demand for new build and retrofit projects. However, there are significant challenges in meeting these ambitious targets.
The hurdles labour need to jump through
Labour have inherited a difficult housing market with rising house prices and mortgage rate increases. This is against an economic back drop of inflation, high prices, rising energy costs and supply chain delays. Renters are facing higher costs with the lack of affordable homes and building targets have been missed year-on-year.
To achieve their ambitious pledge, the UK will have to build 300,000 new homes per year – a figure not seen since the 1970’s. Despite the number of proposed reforms, many will take time to come to fruition. Additionally, external factors such the ongoing skill shortage in the construction industry will need to be addressed. According to the CSN Industry Outlook 2024-2028, an extra 251,500 construction workers are needed by 2028 to meet the expected levels of work.
Labour have responded by promising to boost apprenticeships, establish technical colleges and scrap the apprenticeship levy – important long term strategies but ones that won’t immediately resolve workforce shortages.
The key to success lies in building more affordable social homes. Historically, this was achieved through substantial government funding but in today’s economic climate, replicating that scale of investment seems unlikely.
Next steps
Building more homes will undoubtedly benefit the construction industry but currently the workforce cannot accommodate the proposed demand. While Labour repeated their aim to build 1.5 million homes in their Party Conference, they did not address how they plan to tackle the construction skills shortage or how local authorities will manage this extra work.
The industry waits anxiously on the upcoming autumn budget set for the 30th October 2024 to see if the government will clarify the number of social homes that the government intend to allocate to their housing target. Many see this as the key to solving the housing crisis.
Labour’s first year will be a crucial indicator of whether they can deliver on their manifesto promises. Overcoming the construction skills shortage and getting spades in the ground will be essential as only then can Labour turn the housing crisis into a lasting legacy of their government.
