Craig Hall

Tuesday was a huge day for those of us with an interest in house building and – even more excitingly – housing supply statistics. The big news that the combined mandatory housing targets will now sum to 370,000 rightly attracted a huge amount of attention. The scale of this ambition simply cannot be underplayed. For historical context, on this net supply basis, England has never achieved anything like these numbers. The much-vaunted postwar housing boom of the 1950s and 1960s came at a time of mass demolitions... ...an estimated 80,000 per year at points during those decades. So while the achievement was huge in terms of sector capacity, when it comes to the impact on affordability and the need for land it was less significant than the numbers we are talking about now. Indeed, net housing supply through the 1960s was around 224,000 homes per year, significantly below what was being produced during the years when the original NPPF, combined with support for buyers through Help to Buy say net supply touch a quarter of a million. The standard method calculation for London has attracted some attention with concerns expressed that the drop from the previous Standard Method which was just shy of 100,000 to a new target of 80,000 represents some kind of politically-motivated horse trading or a lack of ambition for the capital. The introduction of a housing target for London that is extremely stretching but more achievable allied with a proposal to promote sensible green belt release and an overall approach which seemingly has buy-in from the London Mayor will provide at least the platform for an increase in supply – unlocking demand may very quickly become the challenge. We can theorise about targets and numbers but the fact is London is wildly far away from reaching these numbers based on recent years performance and, in all likelihood, numbers published later this year for 2023/24 will see completions dipping further. Looking further back, a cursory look at recent averages shows that 80,000 homes per year or anything like than magnitude will be hugely challenging numbers to achieve: 🔹 5-year net addition average: 40,081 🔹10-year average: 37,653 🔹20-year average: 32,924 It’s been said that the capital – and the London Mayor – would not be pulling its weight under the new proposals announced. But 80,000 homes per year again represents a greater contribution to the overall needs figure of 370,000 than London has offered over recent decades. Over the past 10 years, London has provided an average of 17.6% of England’s total net supply. The numbers published by ministers on Tuesday would see the capital pushed for a contribution of just under 22% of the country’s housing requirements. Of course, it’s one thing to theorise and to pontificate about numbers but the challenge will come in turning this into reality. Will enough of the required land be viable? And what will the market be like for all these theoretical new homes? Without some level of confidence around the new build mortgage market and the appetite of Affordable Housing providers to acquire and manage Section 106 social and affordable homes turning the numbers on paper into bricks and mortar cannot be taken for granted. The headline announcement was an extremely welcome one, but this really represents day one in turning around ailing housing supply and finally getting on with tackling the entrenched housing affordability crisis before it’s too late. There are barriers and challenges in every direction house builders turn at the moment. Planning system reform is the right first step and it’s a big one, but the scale of the challenge is immense. The industry is very pleased with the rapid progress made to date and stands ready to play its part. - 🖊️@DOLeary100 #PlanningReform @mhclg @AngelaRayner

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