OBR: NPPF overhaul to take Labour within ‘touching distance’ of 1.5m homes
The Office for Budget Responsibility said Labour’s planning reforms could provide a £15.1bn boost to the economy over the next 10 years and deliver 1.3m homes by the end of the parliament, according to Chancellor Rachel Reeves.
The bullish prediction came during the Chancellor’s Spring Statement, less than a week after damning statistics on planning submissions and approvals were released by the government.
Just over 30,000 housing projects were given the green light nationally in 2024, the lowest figure since records began in 1979.
However, the government is confident the reforms to the National Planning Policy Framework it has imposed – include reintroducing mandatory housing targets, increasing them significantly in many areas, and introducing the idea of Grey Belt – will have the desired effect on housing delivery.
“Changes to NPPF alone will help build over 1.3m homes in England over next five years, taking us within touching distance of our manifesto promise to build 1.5m homes England in this parliament,” Reeves said.
Reeves’ said the OBR, the government’s official forecaster, has also predicted a “40-year housebuilding high”, which could deliver up to 305,000 homes annually by the end of 2029/30.
Only 234,000 new homes were delivered in 2022/23 – the last year from which data is available.
The OBR also predicts Labour’s planning reforms would “permanently increase level of real GDP”, Reeves said.
The predicted £15.1bn economic boost over the next 10 years is the “biggest positive growth impact OBR have ever reflected in a forecast for a policy with no fiscal cost”, she said.
The Chancellor ended her speech with a warning to the Conservatives and Lib Dems, who have opposed Labour’s Planning and Infrastructure Bill, which sits alongside the NPPF reforms and aims to “get Britain building” and unlock growth.
“If the parties opposite do not support these reforms they are opposing economic growth, more homes for families, and good jobs across our country.”
Cuts to welfare to fund increased defence funding – including £200m for a nuclear defence campus in Barrow – were features of Reeves’ statement, which the Conservatives had branded an “emergency budget”.
She also pointed to global economic uncertainty and “unstable trading patterns” as the cause of increased borrowing costs, with the OBR predicting a £4.1bn deficit by 2029/30 and halving the growth forecast to 1% for the coming year.
Reeves used her Spring Statement as an opportunity to touch again on economic stimuli announced earlier in the week – namely a £600m investment to train 60,000 construction workers by 2029 and an additional £2bn top up for the Affordable Homes Programme.
Not a chance of hitting those targets. The impediments being loaded upon developers, never mind the wider viability issues that already exist, make this a political pipe dream. Throw in an inefficient, unproductive public sector that seems to work at half-speed and I’ll be retired long before this has a hope of becoming a reality.
By Buyer beware
So in 9 months the target has been reduced by 200,000 homes. Lets all have a look at the OBR report to see what impacts the lack of skilled workers, the continuing disruption the Building Safety Regulator is having on delivery (and viability of schemes) and what impacts the new Building Safety Levy will have on viability. Oh and employing 300 new planning officers will also not help.
Meanwhile on planet earth a realistic (and ambitious) target for this Parliament – 1 million homes!
By Anonymous
Significant supply side reforms needed to get to 1.3m homes
By Anonymous
With predictions and statistics, you can prove anything to bolster weak arguments. Facts are less pliable… we’ll have to wait and see. I’d like to hope, although they have been slow out of the starting gate and a return of Help to Buy would have helped housebuilder confidence in increasing construction etc.. The Government made money on that scheme last time round.
By Anonymous
House building is the cheats way to grow the economy. It’s short term and unsustainable in the long run. Labour need to think of more long term sustainable and creative ways to grow the economy. This is just plain lazy and an unnecessary attack on our countryside and valued green spaces.
By Ian Baker
The OBR has clearly never dealt with the building safety regulator. 1.3 million new build homes is fantasy.
By Anonymous
Never going to happen – you can’t just push a button to build more houses.
The lead in is at least 2 years due to the inefficient Planning system and vast amount of regulations imposed.
By Bash the Housebuilder
An initiative to liberate the 700000 consented homes should be a starting point, as developers want to throttle back supply to keep prices high. Skills shortages in the construction industry, continued public sector cutbacks, and layers of “green” targets that fatten the Planning system will hamper any increased delivery no matter how well intended.
By In The Trenches
“ return of Help to Buy would have helped housebuilder confidence in increasing construction etc.. The Government made money on that scheme last time round.”
Hahahahaha. I’m sure listed house builders would LOVE the return of Help to Buy. But it was stopped for good reason – it was hugely inefficient and served mainly to inflate house prices without increasing output to any great degree. It was one huge subsidy to an already very profitable industry. There are much better ways to use that same subsidy and that’s directing to the direct provision of affordable housing for sale and rent via housing associations and local councils. Cut out the large builders altogether.
By Big builder watch
@big builder watch. Help to buy was an interest free equity loan to purchasers not a subsidy to housebuilders and it is expected to return circa £2bn profit on the investment to the Government (£900m to date). Over 80% of applications were to first time buyers. Direct it to affordable housuing and rent by all means although stop the right to buy as it’ll only be a subsidy and we’ll have a never ending issue of supply in this sector. The main point is we need to be building more homes of all tenures
By Max Homes
@Max the main impact of Help to Buy was to inflate house prices for homes developers were going to build anyway, so yes it was a fantastically inefficient policy and yes it did function as a subsidy
By Big builder watch