British housebuilders must be put ‘on a war footing’ if the industry is to have any hope of developing the 1.5m new homes targeted by Labour within five years, according to industry experts.
Hurdles to hitting the ‘extremely optimistic’ goal set by Keir Starmer include staff shortages, high interest rates, small builders going bust and lack of materials.
Labour has vowed to rip up the ‘broken’ planning system in the biggest shake up of the rules for a generation so 300,000 homes can be built every year of this Parliament.
Deputy Prime Minister Angela Rayner has unveiled plans to allow more homes to be built on green belt land and impose mandatory targets on councils. But the overhaul has faced a backlash from campaigners and local authorities, who said the figures were not achievable.
And experts in the sector said planning rules are not the only major challenge.
The UK housebuilding sector has endured a turbulent year as high interest rates deter buyers. Shares across the industry have tumbled in recent months as hopes of a building boom fade.
Labour wants 300,000 homes to be built every year of this Parliament
Bovis Homes owner Vistry – which issued a third profit warning in three months on Christmas Eve following a major accounting blunder – is down more than 60pc. And luxury developer Octagon sounded alarm bells last month when the 45-year-old firm filed an administration notice.
Richard Donnell, head of research at property website Zoopla, said: ‘When we don’t build enough homes people rush to blame the planning system. That isn’t the only thing we need to sort out.’
Ian Fletcher, chief executive at the British Property Federation, said: ‘I’m supportive of the Government being ambitious. But I’m also realistic about the challenges. It is going to take a housing sector on war footing to deliver those sorts of numbers.
‘Everything needs to be cranked up in terms of the approach Government takes to planning, construction skills, materials, tenures – you’ve got to be a champion of private renting, owning and social renting.’
Paul Rickard, head of London developer Pocket Living, said dwindling numbers of small- and medium-sized housebuilders would put the 1.5m homes target at risk.
‘This sector is continuing to die. Government is going to need continued and committed focus to save the SME sector,’ he said. ‘If you do all those things, you might have a fighting chance of hitting 1.5m.’
In 1988 SMEs built 39pc of new homes, a figure that has fallen to 10pc. As of September, construction firms accounted for 17pc of insolvencies in England and Wales, making it the worst affected industry.
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