Further and Faster Planning Reforms won’t solve the housing crisis if there are no buyers for the homes
Imagination and Courage needed to enable Social Housing Providers to fund the building of affordable housing
28 January 2025 | Author: Heather Powell
The Chancellor’s announcement (26th January) will not solve the UK’s housing crisis without tackling the lack of funds in the social housing sector
Heather Powell, Paretner and Head of Property said:
The Chancellor’s announcement, published 26 January, trumpeted the removal of further ‘red tape’ to facilitate the building of homes close to transport hubs and made a lot of noise about reforming the planning system and delivering growth.
But the proposal does not solve the issue that private buyers, and social housing providers, do not have the funding to buy 1.5millon new homes. Developers build homes when they are confident that they can make a profit from selling them, all of them, those built for individuals and families to buy and those allocated for the Social Housing providers.”
The Chancellor’s announcement referred to the £500million promised to the Affordable Homes Programme in October 2024 – but even Rachel Reeves estimated this would only fund 5,000 new homes, which is nothing compared to her target of 1.5 million new homes.
With no more money on the table for Social Housing Providers, and interest rates remaining stubbornly high, even if planning permission is granted for 1.5millon new homes over the life of this parliament they are very unlikely to be built, as there are not enough buyers with the necessary funds.
No amount of red tape cutting will help if there is no money to buy the new homes that she wants the developers to build.
Heather said:
The UK housing crisis will only be resolved by addressing delivery and affordability. The Government could address affordability in the Social Housing sector by making available government owned sites to the Social Housing providers at no cost.
Developers could then enter into contracts to deliver affordable housing, and, with the land cost eliminated from the costing, Social Housing providers will be able, on many sites, to make the finances add up. Courage, and imagination, are required to deliver houses in the current market, not a continual rant about the planning system.
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