Stimulating housing supply – Government initiatives (England)

300,000 homes a year by the mid-2020s

The 2015 Government’s ambition was to secure 1 million net additions to the housing stock by the end of the Parliament which was expected to be in 2020. The Housing White Paper, Fixing our broken housing market (February 2017) included a number of initiatives which aimed to secure a step-change in housing supply.

The Conservative Government elected in 2017 had a manifesto pledge to meet the 2015 commitment to deliver 1 million homes by the end of 2020 and to “deliver half a million more by the end of 2022.” The manifesto said that, if elected, the Government would deliver on the reforms proposed in the 2017 Housing White Paper.

The 2019 Conservative Government has a manifesto pledge to “continue to increase the number of homes being built”. The manifesto also referred to a need to rebalance the housing market towards more home ownership:

…we will continue our progress towards our target of 300,000 homes a year by the mid-2020s. This will see us build at least a million more homes, of all tenures, over the next Parliament – in the areas that really need them.

The Single Departmental Plan (June 2019)

The Department for Communities and Local Government (DCLG) was renamed the Ministry for Housing, Communities and Local Government (MHCLG) in January 2018 and the Homes and Communities Agency was relaunched as Homes England. The Ministry’s Single Departmental Plan was last updated in June 2019 (revisions have been delayed due to the pandemic) – the plan set out how the 2017 Government intended to achieve an increase in housing supply and “and put us on track to deliver 300,000 net additional homes a year on average”:

• Progress the reforms in our Housing White Paper.
• Ensure the planning system supports an increase in homes, in the places that need it most.
• Bring forward an Accelerated Planning Green Paper to equip local authorities and the Planning Inspectorate to make swift and effective planning decisions.
• Improve productivity and competition in the housing market, opening it up to smaller builders and those who embrace innovative and efficient methods of construction.
• Support local authorities and housing associations to increase the supply of affordable homes, including through the Affordable Homes Programme.
• Increase home ownership and housing supply through the Help to Buy Equity Loan scheme.
• Encourage best practice in the quality, design and build of homes and places.
• Unlock land to enable homes to be built where they are needed most, including through investment in the Land Assembly Fund and Small Sites Fund.
• Release surplus land already in public ownership.
• Invest in local infrastructure to unlock new homes, including through delivery of the Housing Infrastructure Fund.
• Develop our programme to drive housing and economic growth in the Oxford-Milton Keynes-Cambridge corridor, working with local councils and Local Enterprise Partnerships.
• Ensure local areas have a pipeline of well-planned and well-designed settlements, including through supporting locally-led Garden Communities and improving Development Corporations.
• Continue the transformation of Homes England for completion in 2020.

As noted above, the 2019 Government is building on many of these initiatives – a Planning White Paper was published on 6 August 2020 which:

…proposes reforms of the planning system to streamline and modernise the planning process, bring a new focus to design and sustainability, improve the system of developer contributions to infrastructure, and ensure more land is available for development where it is needed.

Supply and demand side measures

Governments since 2015 have pursued both supply-side and demand-side measures. There has been, and continues to be, a desire to increase home ownership, particularly amongst first-time buyers, which is supported through savings products such as the Lifetime ISA and through equity loan schemes. The National Planning Policy Framework requires major developments involving the provision of housing to ensure that at least 10% of the homes are available for affordable home ownership (some exemptions apply). The 2019 Government is committed to introducing a Right to Shared Ownership and a new First Homes scheme for first-time buyers.

There is an expectation that most new building will be carried out by the private sector. To this end, much Government effort to stimulate house-building has been focused on planning measures to “make the system more open and accessible and tackle unnecessary delays.” Broadly, developers with planning permission are expected to use it and local authorities are expected to have an up-to-date plan in place based on an objective assessment of housing need within the area. Substantial reforms are set out in the August 2020 Planning White Paper.

Governments have sought to diversify the housing market by encouraging and supporting development by smaller builders and those interested in embracing innovative and efficient methods of construction.

There are concerns that there is not enough support for affordable rented housing, particularly at social rents, although the decision to lift the borrowing caps from local authority Housing Revenue Accounts with effect from 29 October 2018 was welcomed across the sector. There is doubt that the target of building 300,000 homes a year will be achieved without further ‘muscular’ action, particularly when the impact of the coronavirus pandemic is taken into account. The 2020 UK Housing Review noted that annual average housing completions in England only reached 300,000 in one of the past six decades – the 1960s.

Other relevant Library papers

Detailed information on action taken by the 2015 Government to improve the planning system can be found in these Library briefing papers Planning for Housing (03741); Planning Reform Proposals (6418); and Planning reform in the housing white paper (7896). There is also What next for planning in England? The National Planning Policy Framework (8260). Planning for the Future: planning policy changes in England in 2020 and future reforms covers changes proposed in the August 2020 Planning White Paper.

Tackling the under-supply of housing in England (7671) considers key trends in housing supply in the UK and focuses on some of the of the key barriers and potential solutions to increasing housing supply in England.

What is affordable housing? considers how affordable housing is defined in England and looks at key trends in the affordability of different tenure types.

A new era of social rented housing in England? considers the prospects for growth in the development of social rented housing to meet assessed need.