Yahoo Finance Starmer’s promise to build 1.5m home in five years will fail, warns Crest Nicholson chief
Sir Keir Starmer’s home building plans will not yield results for “at least five years”, the chief of one of Britain’s biggest developers has said, in a blow to the Labour leader’s promise to fix the housing crisis.
Peter Truscott, chief executive of Crest Nicholson, said Sir Keir’s promise to unlock “grey belt” land for development and build 1.5m new homes lacked detail and would take years to implement.
Mr Truscott said: “They’re not bad policies. But there’s no clear guidance on what the policy actually is. Which ‘poorer quality green belt’ can we build on?”
At the Labour Party Conference in October, Sir Keir announced plans to unlock some green belt land for development – areas with “disused car parks, dreary wasteland” that he dubbed the “grey belt”.
Analysts estimate that four million new homes could be built if a quarter of green belt land was rezoned for development.
Sir Keir has promised to build 1.5m new homes within five years of his party being elected. He said Labour would get “shovels in the ground and cranes in the sky” to deliver “opportunities for first time buyers in every community”.
However, Mr Truscott cast doubt over Sir Keir’s plans. He told The Telegraph: “I do not expect a single house to be occupied as a result of those policies in the next five years. Not a single one.
“By the time the planning system is changed, local plans reflect these changes, land is bought, infrastructure is provided and legal challenges are seen off, years will fly by.
“It will be many years until it bears fruit. We’re talking about completely changing the planning system.”
Sir Keir has vowed to “bulldoze through” Nimby opposition to new developments and branded himself a “Yimby” (Yes in my back yard).
However, Mr Truscott, 61, said it was “virtually impossible” to speed up development quickly given the backlog in the planning system.
The Crest Nicholson chief said Sir Keir’s overhaul did not take into account the huge lack of resources available to local authorities, which must approve all new developments in their areas. Councils are already grappling with backlogs and constant changes in regulation.
The time it takes to get planning permission has more than tripled since the 1990s. Mr Truscott said: “Typically, now, it takes about two years just to get planning permission.”
The Home Builders Federation (HBF) has described the planning system as “one of the biggest barriers” to building homes.
FTSE 250-listed Crest Nicholson is one of the 20 biggest housebuilders in Britain, completing 2,734 properties last year. The business has developments across the Midlands and the south of England.
Mr Truscott, who has run the company since 2019, said: “Labour are more pro-development. I think that would be the reason in the long haul for the sector to support them.
“But at the same time I have a concern that they are less likely to manage the economy well.”
He added that Labour had “failed its first test” by opposing plans to scrap environmental red tape that has hobbled house building activity.
Rishi Sunak in September announced plans to axe nutrient neutrality rules, which block housing schemes unless they can mitigate their impact on local waterways and ecosystems.
The HBF estimates the rules have stopped at least 150,000 homes from being built and have warned that the equivalent of 112 homes a day are being added to the backlog because of the red tape.
Mr Truscott said: “If you’re a small housebuilder, and you work in one area and you have this nitrates issue, you have gone bust. You have no choice but to go bust.”
Crest Nicholson has 10 sites on hold due to nutrient neutrality rules, he added. “In terms of capital, we have tens of millions of pounds just in limbo.”
Labour initially signalled it would support the Government’s plans to scrap the EU-era regulations. However, Shadow Levelling Up Secretary Angela Rayner and Shadow Environment Secretary Steve Reed subsequently came out against the policy.
Mr Truscott said: “Angela Rayner’s decision not to support the planning change on nutrient neutrality just says to me that Labour is just playing politics.”
He recalled the phrase used by former Labour Party leader Neil Kinnock in a 1985 speech: “You can’t play politics with people’s jobs and with people’s services or with their homes.”
Mr Truscott said: “That’s what I’d be saying to Angela Rayner.”
House building has become a key battleground ahead of the election next year, with a lack of supply contributing to spiralling costs in both the rented and owned market.
The HBF predicts that the number of homes built next year will fall to a record low of 120,000, compared to 204,530 delivered in 2022. Official figures suggest around 340,000 new homes are needed in England each year to meet demand, of which 145,000 should be affordable.
House builders have been cutting back on completions as soaring interest rates hammer buyer demand and after the withdrawal of government support schemes such as Help to Buy.
Housebuilders Taylor Wimpey, Persimmon and Barratt Developments have all committed to building thousands fewer homes next year as a result.
Mr Truscott said: “Tactically, the housing sector will seek to ride this out until it returns to normal market conditions.
“If there are any other shocks, macroeconomic shocks, the market could become more difficult.”
Crest Nicholson issued a profit warning in August and the company’s share price has plunged 29pc from the start of the year.
Mr Truscott said: “If our shareholders are patient, the returns will come back. The supply and demand imbalance is real. The population is growing, there were 600,000 extra people last year – this creates a need for at least a quarter of a million new homes.”
The Bank of England held interest rates at 5.25pc this month, a decision welcomed by Mr Truscott.
“As long as rates remain at this level, the market will be sluggish but manageable.”
However, he does not expect the economy to improve until the second half of 2024.
In the meantime, Mr Truscott believes a successor to Help to Buy must be launched by the Government in order to ensure the industry is in a position to bounce back once the market improves.
“People are retiring from the construction industry and we have an ageing workforce,” he said. “If new recruits and new apprentices are not taken on, the capacity is lost. And when the market picks up, we will not have people to build the homes.”
