Labour’s first six weeks: ‘Get Britain building again’

In this insightful blog, Bianca Treggiari, our Capital Raising Junior Associate, explores the first six weeks of the new Labour government and its ambitious plans to “Get Britain Building Again.”

In the recent general elections, the Labour Party clinched a decisive victory, securing a mandate that underscores the public’s desire for transformative policies. Central to Labour’s agenda is a desire to revitalise the nation’s housing sector, encapsulated in the slogan; “get Britain building again.” This, while simple, conveys a commitment to addressing one of the UK’s most pressing social and economic issues: the chronic undersupply of housing.

In the past several weeks, Labour has set a dynamic pace, implementing policies designed to increase housebuilding, support first-time buyers, and ensure sustainable development.

The undersupply of affordable homes has been a focal point for political debate for over a decade. Recent data suggests the UK will need to build over 400,000 homes annually over the next five years to account for stronger population growth, as well as to make up for the homes that would have been built if targets set since 2019 had been achieved. Recently, the Labour Government raised the annual housebuilding target from the manifesto pledge of 300,000 to 370,000. This adjustment would result in the delivery of 1.85 million homes over the next five years.

Within days of taking office, the newly appointed chancellor, Rachel Reeves, laid out plans to prioritise house building to stimulate economic growth. She confirmed Labour’s commitment to constructing 1.5 million homes in England (revised to 1.85m) throughout this parliamentary term as well as the restoration of mandatory house building targets for local councils.

A strategic focus on house building has been apparent in the short time Labour has been in power. This is likely to provide significant tailwinds for the UK property market.

Here’s an overview of their key actions and commitments so far:

Planning Process Reform

The UK’s planning system has long been regarded as weak and fragmented. A recent Glenigan report highlights that as of March 2024, the number of new homes and sites receiving planning permission has plummeted to its lowest point since records began in 2006. This has led to a housing pipeline even smaller than after the 2008 Global Financial Crisis.

To overcome the bureaucratic hurdles that have historically slowed down housing development, Labour has introduced reforms to streamline the planning process. In her first speech as chancellor, Rachel Reeves announced plans to reform the National Planning Policy Framework (NPPF), the guidelines which govern the house planning system, to help deliver new homes. A draft NPPF is expected to be published at the end of the month.

A few weeks later, this commitment to house building was further reaffirmed at the King’s Speech at the state opening of parliament, via the announcement of the New Planning and Infrastructure Bill – a significant legislative move aimed at accelerating the development of infrastructure and the construction of 1.5 million homes. It is expected this new legislation will “turbocharge building of houses and infrastructure”.

In addition, to further support the planning system, the Bill includes additional funding plans for planning officers, supported by an increased stamp duty surcharge on non-UK residents. The intention is to hire 300 new planners to help speed up approvals for new homes. In addition, the legislation also aims to classify more schemes as ‘Nationally Significant Infrastructure Projects’, to transfer final approval authority from local councils to the Housing Secretary.

Supporting Home ownership/First Time Buyers

Labour’s housing policy also includes measures to support first-time buyers, giving them the chance to purchase homes, thereby helping more people to get onto the property ladder. The Government has introduced a permanent Mortgage Guarantee Scheme to help first-time buyers secure the necessary funding to purchase homes. This should support those struggling with large deposits and help lower mortgage costs to make homeownership more accessible.

Promoting Urban Regeneration

In addition to focusing on new builds, Labour has placed a strong emphasis on urban regeneration. This includes comprehensive redevelopment plans for neglected areas, encouraging the adaptive reuse of existing buildings to meet housing needs. In addition, Labour aims to address the housing crisis by developing “grey belts,” which are low-quality and underutilised parts of the green belt, such as wastelands and old car parks. These initiatives aim to breathe new life into urban areas, stimulating local economies and creating mixed-use developments that combine housing with commercial and community spaces​ (Urbanist Architecture)​.

EPC targets back on the agenda

Labour has reinstated the plan to require landlords in the Private Rented Sector (PRS) to upgrade their properties’ Energy Performance Certificate (EPC) rating to a ‘C’ or above by 2030, or face being barred from letting them out. This policy aims to combat fuel poverty, impacting over three million tenants, and follows similar proposals from the previous Conservative government. However, concerns remain about the financial burden on landlords, especially smaller ones, with calls for clear guidelines, exemptions, and support to help meet these targets. The National Residential Landlords Association (NRLA) has stressed the need for realistic timelines and adequate funding.

In summary

Labour’s ambitious housing agenda signals a decisive shift in the UK’s approach to tackling the housing crisis. By committing to build 1.85 million homes and streamline the planning process, the government aims to address the chronic undersupply of housing that has plagued the nation for years. Alongside these efforts, the focus on urban regeneration, support for first-time buyers, and reinstated EPC targets, demonstrate a comprehensive strategy designed to not only increase housing availability but also enhance the quality and sustainability of living spaces. As these policies take shape, they promise to reshape the property landscape, providing much-needed momentum to the UK housing market. Our Head of Development, Steve Larkin, says, much of this new reform should feed down to SME developers who can play a major part in helping to deliver those 1.85m new homes over the next 5 years.

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