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New Homes

Volume 832: debated on Tuesday 12 September 2023


Asked by

To ask His Majesty’s Government in what year they expect to reach their target of building 300,000 new homes a year.

My Lords, we are continuing to work towards our ambition of delivering 300,000 homes a year. This has always been a stretching ambition and we have made strong progress. The three highest rates of annual supply in more than 30 years have all come since 2018. We are aware that increasing supply even further will be made more difficult due to the economic challenges we face, but we are engaging with Homes England, developers and registered providers to understand their delivery challenges.

I am grateful to my noble friend, but has she read the leader in last Saturday’s Times? It said of the Government’s housing target:

“That goal has now been sacrificed on the altar of appeasing rural Conservative backbenchers fearful of a backlash in their green and pleasant constituencies”,

and concluded:

“The political calculations of the Tory party are in danger of strangling Britain’s housebuilding industry, retarding economic growth and depriving young people of the affordable homes they so desperately need”.

Can my noble friend confirm that this controversial policy, which was launched in a consultation document last December and has not yet been adopted, might be amended in light of the widespread criticism that it has now generated?

Yes, I have read the Times article. We are carefully analysing the many detailed responses we received to the consultation and expect to respond formally later in the autumn. It is worth making it clear to my noble friend that the proposals in the consultation are not government policy. My noble friend should also be reassured that, as I have said before, the Government remain committed to our ambition of delivering 300,000 new homes per year. The proposals in the consultation are designed to support areas to get more local plans in place. That will deliver more housing and stop communities being exposed to development by appeal.

My Lords, for some weeks we have heard scare stories that 100,000 new homes are blocked by the rules on nutrient neutrality. I am therefore glad that the Government have debunked that myth with their recent explainer, which states that only 16,500 homes are currently impacted. By comparison, Savills estimates that 150,000 homes are land-banked in 2021, and Homes England sits on 250,000 more new homes. Given those numbers, is there any real justification for the Government’s assault on the habitat regulations, the health of our rivers and their own good environmental reputation?

Yes, there is, my Lords. The 16,500 figure is annual, while the 100,000 figure is between now and 2030. The Government have put in place a package of mitigation that will allow us to deal with nutrient neutrality not as a sticking plaster, stopping housing being built, but by dealing with the issues at source. If the noble Earl reads the mitigation circumstances, he will see what we are doing and how much we are investing in that.

My Lords, I found the Minister’s reply rather disappointing. I appreciate the ambition, but it is the implementation that is the major problem. Drastic cuts of funding to social housing have resulted in many households in need being trapped in the private rented sector, and the number of affordable homes is just not meeting that need. Current conditions have meant that private sector building has flatlined, but social housing builders can be countercyclical and, with the right investment, could do so much more. The Government will reach their target only by investing massively in social homes. Do the Government and the Minister agree with that? If not, can she please explain how that target will be met?

My Lords, the Government are committed to increasing the supply of affordable housing, which is why, through our £11.5 billion Affordable Homes Programme, we will deliver tens of thousands of affordable homes for sale or rent across the country. The levelling up White Paper committed to increasing the supply of social rented homes, and a large number of the new homes delivered through our Affordable Homes Programme will be for social rent.

My Lords, I thank the Minister for that answer about affordability, but I wonder what steps the Government are taking to ensure that the definition of affordability is a good one. Could we redefine it so that it means affordable for most local people in that community, and look at what that is doing to house prices generally in each area?

We had a debate on this quite recently on the Levelling-Up and Regeneration Bill. Through the consultation on the NPPF, we are looking at affordable housing and, when we have finished that consultation and looked at the results, we will consider it further.

My Lords, the work done on the National Planning Policy Framework by my noble friend Lord Pickles, Brandon Lewis and Greg Clark was in my view one of the major achievements during the coalition, because it provided a sensible balance between a stick and a carrot, with local authorities producing a plan and a mechanism for the Government to step in if they did not. This led to a significant increase in the land supply. With the changes that have taken place in the last few months, the mood music is completely different. Local authorities know that applications to appeal are quite futile. A disastrous thing has happened. What do the Government intend to do about it? If they do nothing, the 300,000 target will be pure fantasy.

I quite agree with my noble friend about the importance of the NPPF. That is why we are consulting on it, will review it when we have the results of the consultation and will come back out to consult on our further ideas on how we can update it—we cannot leave it there in aspic for ever. By doing that and by the measures in the Levelling-up and Regeneration Bill to modernise the planning system, we will deliver more houses through local plans and hit the 300,000 target.

My Lords, I have relevant interests in this Question. Councils’ local plans incorporate their share of the national housing targets. Can the Minister explain how national housing targets can be achieved when more than 60% of local councils do not have an up-to-date local plan?

The noble Baroness is right: we need more local plans. That is how we will deliver more houses. We know from evidence that local planning authorities that have local plans deliver more houses. That is why we have the Levelling-up and Regeneration Bill, are changing and simplifying making local plans and will insist that local authorities deliver local plans. If they do not, we have measures to push them to do so.

My Lords, in her response to the debate on housing targets during the Report stage of the Levelling-up and Regeneration Bill, the Minister stated:

“To get enough homes built in places where people and communities need them, a crucial first step is to plan for the right number of homes”.—[Official Report, 6/9/23; col. 426.]

The National House Building Council’s statistics show a dramatic decline in registrations in quarter 2 across most regions, compared with the same quarter last year; it was down 67% in the north-west, for example. It is going in the wrong direction. What is the Government’s plan to ensure that local targets meet that 300,000 homes target?

As I said to my noble friend Lord Young of Cookham, we are in an economic situation that is not as favourable for housebuilding as it was, and therefore we have to work with Homes England, developers and local planning authorities to ensure that we give all the support we can, reinvigorate the housing market and get these houses built.

My Lords, when house prices fall, as they are doing now, big building firms tend to sit on their balance sheets and play the waiting game. That is very bad news for new homes as big builders now have a 90% share of the UK market while SMEs have seen their share collapse from 40% to less than 10%. Does the Minister agree that this market domination is stifling competition and is bad news for the supply of new homes?

I absolutely do. We need to spend more time with our SME housebuilders. The levelling-up home building fund is providing £1.5 billion in development finance to SMEs and builders for exactly this reason: to support them to build more homes. The Levelling-up and Regeneration Bill is making changes to support SMEs, making the planning process much faster and more predictable for them so that they can stay in business and build more houses.