Amid the shock of the Office for Budget Responsibility (OBR) halving its growth forecast last month, one remarkable finding gets too little attention. It predicts housebuilding will rise to its highest level in 40 years, adding 0.2% growth or £6.8bn by 2029-30, potentially rising to more than 0.4% by 2034-35. The government has said that housing scores the biggest positive growth effect from a “zero-cost policy” the OBR has ever forecast.
This is especially remarkable given that 2024 saw the fewest planning permissions granted for new homes for a decade, and the worst on record, according to the Home Builders Federation (HBF). Planning applications plummeted when the last government scrapped councils’ mandatory housing targets, but since Labour reimposed a national planning policy framework, applications in the works have risen by more than 160%.
The OBR expects Angela Rayner to reach 1.3m of her 1.5m new homes target, but that’s without taking into account the planning act now going through parliament, clearing obstacles in its path. Nor does the OBR include last month’s £2bn of new investment to support the “biggest boost in social and affordable housebuilding in a generation”, including up to 18,000 new social and affordable homes, a “down payment” ahead of more long-term investment promised later this year.
Also uncounted was the “new homes accelerator” scheme sending planning experts to speed up delivery by unblocking thousands of new homes, including on seven new sites announced earlier this year. Nor did the OBR count in GDP growth from new towns: more than 100 proposals are with the new towns taskforce, reporting this summer. All these, the government says, should see the 1.5 new homes target reached.
The planning bill can’t come soon enough: reform was proposed by Conservative governments but stymied by Tory MPs fearful of developments in their patch. Take the frustrations of just one social housing provider, Stonewater. It aims to build 1,000 social homes a year, having secured £200m investment in 2023 and £250m in 2021, and currently manages 40,000 homes. But many developments are stuck in council planning departments: the law demands a response within 13 weeks – but without fines they can delay for years. Stonewater, they tell me, had one held up for two and half years in Frome; another for 62 homes in Worcester took almost as long. Right now they await permission for 72 homes in Lutterworth, Leicestershire, on land they bought back in October 2021. The final hitch is with the county council’s highways – they say, when I ask, that it will be resolved “soon”, but it’s still not signed.
In Terrington St Clement, near King’s Lynn, Norfolk, Stonewater bought land for 87 homes in 2023 – there is outline agreement for building but still no permit. “Private developers can afford to wait,” says Jonathan Layzell of Stonewater. “When they build, they sell and get their money back fast – but we rely on long-term income from social rents while paying a mortgage. Missing years of rent in planning delays means we build less.” Isn’t it easier to get permission for social housing, especially in the rural areas where Stonewater builds? He laughs: “That’s what I had thought, but it’s harder. There’s social stigma: ‘We don’t want those people here.’ We argue back: ‘Who’s going to work in your schools, shops, pubs, local services?’ But the answer is often: ‘Over there, not here.’”
Time and again council planning committees override the advice of professional planning departments, even when planners warn them the applicant will undoubtedly appeal and win, costing the council about £100,000. But the planners say councillors want to prove to their ward “I tried to stop it”, even when they knew they couldn’t block a site within an agreed local plan. That’s why the new bill takes away much power from council planning committees. All but major decisions will be made by professional planners, council committees will be smaller and – here’s a novelty – councillors on that committee will have to be trained in planning, with a certificate to prove it. (Somewhat ironic when ministers controlling billions scoot through revolving doors between departments of which they know nearly nothing with no hint of training.)
All that is good news. But big blockages remain, especially the lack of experienced planners lost in the Tory years. Take the district council of King’s Lynn and West Norfolk, where Stonewater has been waiting since 2021 for its 87 homes. They’ve had bigger things on their plate, such as three years of due process before finally rejecting plans for a pig and chicken factory megafarm this month.
The council had no local plan, but Labour now demands one, so it has had to double housing sites to nearly 1,000 a year. Drawing it up took “in excess of 175,000 officer hours of research, analysis, planning and more”, independent councillor Jim Moriarty, cabinet member for planning, says. He welcomes Labour’s planning bill, but public comments suggest local outrage at more housing. As ever: “Yes, but not here.”
Moriatry managed to hire two planners last week, but he’s still two short. It’s a country-wide problem, says the HBF, whose report Planning on Empty shows the worst-hit councils short of 40-50% planners. The Royal Town Planning Institute (RITP) tells me the crisis is not in recruits but in retaining the experienced: 25% leave for the private sector. The government promises 300 more planners, but the HBF says it needs 7,000. Less stress and higher pay is a strong draw to private work, so the new bill allows councils to raise planning fees to cover a department’s costs, including paying planners more, so long as there’s no suggestion of councils selling permissions for profit.
Lack of seasoned planners is only one obstacle. The government is accelerating construction training, but the HBF says every 10,000 additional new homes need 30,000 new recruits. Here’s Labour’s dilemma: do Home Office immigration numbers matter more than meeting the housing target with migrant workers? Ask the public and they back visas for construction workers by 38% to 16% against. Anti-migrant sentiment will always be a winner for the right. But success in building the most homes in 40 years would surely become one of Labour’s flagship boasts.
Polly Toynbee is a Guardian columnist
