The Government has announced binding targets to compel local authorities to build 370,000 new homes a year, but will it be enough to kickstart the new build sector?
Jody Vincent, Sales Director, the Commercial Window Group discusses.
The Government has said England’s housing crisis cannot be solved without forcing councils to build more homes.
Accompanied by the usual political bluster about transforming the planning system, changes to the National Planning Policy Framework (NPPF) were unveiled on December 12th, the government setting binding targets that will compel authorities to build 370,000 homes a year.
In principle, it’s a step in the right direction for the new build sector. The planning system has been a source of frustration for national and regional housebuilders, ultimately contributing to the nadir in the new build housing sector this year.
Housing starts across the UK slumped 34% to just 29,820 in the first quarter of 2024 underlining the scale of the challenge facing the government. The number of completions in the first quarter of 2024 was down 17% year on year to 38,400 units.
This ranked as the worst quarterly delivery performance for completions since the start of 2016 setting a trajectory of just 153,000 new homes likely be completed in 2024 – half of the previous and less than half, of new government’s annual housing delivery target.
It means a lot is riding on the impact of the changes to the NPPF but with resistance and push back from councils and opposition groups, can it deliver?
What are the key changes to the National Planning Policy Framework (NPPF)?
The Government unveiled significant reforms to the National Planning Policy Framework (NPPF) on December 12. The objective is to address the nation’s housing shortage and stimulate economic growth with the aim of delivering 370,000 homes annually and 1.5 million homes over the next five years
- Mandatory Housing Targets: Local authorities are now required to meet specific housing targets, with the most stringent requirements in the least affordable areas. Councils must develop timetables for new housebuilding plans within 12-weeks or face potential government intervention.
- Brownfield and Grey Belt Development: The policy emphasises a ‘brownfield first’ strategy, prioritising previously developed sites for new housing. Additionally, councils will have to review green belt boundaries to identify grey belt land, lower-quality areas such as disused industrial or retail spaces that could be suitable for development.
- Affordable Housing Provisions: Initial proposals mandated that 50% of homes built on grey belt land needed to be affordable. Instead, the government said that it would require speculative applications approved on the newly defined “grey belt” sites on former green belt land to deliver 15% more affordable homes than in the local housing policy – up to a cap of 50%.
- Local Plan Requirements: Councils are mandated to have up-to-date local plans detailing future housing delivery. Failure to do so may result in government intervention. The reforms also necessitate collaboration with regional leaders to identify optimal development sites.
- Green Belt Considerations: While the reforms encourage the use of brownfield and grey belt land, they also require councils to review green belt boundaries to meet housing targets.
A softening of targets for affordable housing
Perhaps the most significant change to come out of Wednesday’s announcement was the change to the previously proposed “golden rules” which will apply to applications seeking to build on the grey belt.
The government had said that all sites would have to deliver at least 50% affordable homes or be subject to a viability test on the basis of a stringent benchmark land value which housebuilders had argued would make many, if not most, green belt sites unviable.
Following pressure from the house building sector the government’s change instead requires developers to deliver a 15% premium above local policies. It also states that, at the point at which local authorities have new plans in place, the government will let those authorities set the affordability requirement on grey belt sites themselves.
This may be more than the a 10% affordable housing premium on local policies that the The Home Builders Federation (HBF) and the Land, Planning and Development Federation (LPDF) had pushed for.
It is also significantly less than the 50% affordable housing that many affordable housing providers had pushed for – but it does incentivise housebuilders to deliver, as the figures are more likely to add up – something massively important in a sector which has felt the pinch of high employment and material costs and record inflation.
Challenges on the horizon?
Unblocking the planning system, however, does not automatically mean the delivery of more new homes. Even if the Government can overcome opposition and resistance, there is an underlying weakness in the supply chain with multiple housebuilder failures this year, not to mention within their sub-contractor bases.
This in our view represents a bigger challenge. The long-term skills gap, the low availability and high cost of labour, is a challenge for sites and manufacturers.
The Commercial Window Group is designed to eliminate at least some of these. We’re committed to driving change in commercial window and door supply.
It’s made up of a regional installation network, fully qualified and independently audited to survey, estimate, call off, schedule and install windows and doors into new build schemes.
Each member is also highly accredited, complying with a range of SSIPs including, BBA Constructionline Gold, SMAS, CHAS and CQMS.
As part of a bigger and vertically integrated group, we can also offer other benefits. That includes the stability and product range that comes with the backing of one of Emplas, one of the UK’s largest window and door manufacturers. That includes 12-month’s fixed pricing, and product guarantees underwritten by the manufacturer.
Concluding thoughts
The planning system is dysfunctional and needs to change. House price affordability will increase with increased supply.
That will only be delivered, however, with a broader growth strategy for construction and its supply partners, making the housebuilding sector fiscally more sustainable – as well as environmentally.
As a group we’re here to support both ambitions.
For more information on the Commercial Window Group’s next generation high performance window and door ranges and our regional delivery partners call 0800 254 5757 or email [email protected]
