Levelling Up and Regeneration Bill: new homes behind target across London but some boroughs worse than others

(Handout)

The pace of new homes being built in London has fallen woefully behind target as Michael Gove backtracks on the Government’s 2019 manifesto pledge to deliver 300,000 homes across England by the middle of this decade.

In the year to April in the capital there have been almost 20,000 new homes started (19,578), which equates to 110 homes started a day against a target of 143 homes, a success rate of 78 per cent.

This is a 24 per cent increase on 2020 when the housing market was shut for the opening six weeks of the first lockdown and the number of people allowed to work on construction sites was dramatically scaled back in line with covid restrictions.

However, it is behind the peak of 2018 when the number of homes being delivered in London was up at a record high success rate of 82 per cent.

The capital mirrors the national picture. “The last time we built more than the 300,000 homes per annum target was more than 40 years ago,” says Marcus Dixon, director of residential research for JLL.

To deliver the number of units required for England would mean 29 per cent more homes delivered than the current 2021 totals and would require investment at all stages of the housing delivery process,” he says.

Where in London are the most new homes?

Across the whole of the capital, where demand is rising steeply again after a lull during the pandemic, there was just one new home started for every 186 properties in the last year.

But the delivery of new homes varies hugely, borough by borough. Barnet, Southwark, Wandsworth and Ealing were responsible for 30 per cent of all starts in the year to March 2022, the JLL stats show.

This means there is more choice and availability of homes in these areas due to large scale schemes such as Elephant & Castle (Southwark) or Ram’s Quarter (Wandsworth).

In Barnet there was one home started for every 83 existing properties, whereas it was one for every 1,587 in Sutton. The City of London and Richmond recorded no new starts in the 12 months to April.

The Levelling up and Regeneration Bill “does not go far enough”

This research has coincided with the publication of the new Levelling Up and Regeneration Bill, which was met this week with a wall of criticism from the property industry.

The bill abandons previously proposed reforms to the planning laws which were intended to make it harder for local authorities to reject housing developments.

Instead, it sets out a shift in responsibility away from stretched planning departments to citizens, allowing people to approve (or block) a neighbour’s extension, for example, in a process called “street votes”.

When Gove spoke to the BBC Today Programme on Wednesday, he refused to commit to the housing targets set out in the Conservative manifesto of 2019 saying he was “no longer trying to hit a statistical target”.

The Government is “dodging the difficult job of overhauling planning policy and investing in planning departments to provide expertise in the community,” one senior housing market analyst said in response.

“Allowing local communities more control of development in their area is, in theory, a good idea giving them more power to shape the places they live in. And improving the quality of new development should be encouraged,” says Dixon.

“However, there is a danger this panders more to the vocal minority, rather than looking at what the wider community and nation need in terms of new homes,” he adds.

“We’ve got some of the best architects in the world in the UK, as well as some of the most complex heritage constraints,” says Knight Frank’s head of planning Stuart Baillie. “This feels like a return to localism which could be divisive if a community cannot agree on what it wants.”

Housebuilding stalls in the face of “uncertainty”

In response to the new Levelling Up Bill, one central London property analyst told Homes & Property that he has already seen local authorities “abandon their house building targets” because there is so much “uncertainty” caused by Government.

Emily Williams, planning executive at Savills, agrees. “The message seems really confused, the industry does not know whether the Government is sticking to the 300,000 homes target or now and councils will not move forward until we have a clear policy.”

This confusion comes at a critical time economically. Inflation, interest rates and energy bills are rising along and the cost of living is at its highest for 40 years.

Yet, throughout the pandemic house prices across the country continued to rise, driven by a stark imbalance between demand to move and the number of homes available, putting homeownership out of reach for many.

“Current plans don’t go far enough,” says Dixon of JLL. “What we need is a far more radical overhaul to address housing need. With a better resourced planning system encouraging intensification and redevelopment of underused sites and assets.

“We need to embrace and invest in modern methods of constriction and actively encourage new recruits into the construction sector.”

The Levelling Up bill also included an almost-double council tax hike on underused second homes and forced rental auctions on high street units that are sitting empty.