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Fixing viability, not the planning system, is key to deliver on homes targets

EDITOR’S COMMENT There’s no place like home. Never a truer word spoken – thank you, Judy Garland. But a few clicks of some ruby slippers – or a repeated statement/promise/dream – unfortunately isn’t going to enable everyone who needs it to find their place like home.

That seems to be the growing rhetoric around the government’s ambitions to build 1.5m new homes by 2029. From the people EG has spoken to – even those who desperately want to be able to deliver – very few are willing to bet their own houses on us getting anywhere close to that number.

Research from think tank Centre for Cities this week shows we will miss that target by as much as 25%, even with changes to the National Planning Policy Framework and deputy prime minister Angela Rayner’s overturning of every decision made by her secretary of state predecessor Michael Gove.

Centre for Cities based its view on housebuilding analysis from the past 80 years and found that even if private development rose to the same level as its strongest period of performance under the current planning system, we would still fall short of target by some 388,000 homes.

In Greater London, the think tank reckons that over four years, private development would fall short by 196,000 new homes – a whopping 60% below the region’s target.

The OBR believes a more reachable target for 2029 would be 1.1m.

Even housing and planning minister Matthew Pennycook has called the 1.5m goal “incredibly stretching” and admitted that delivering those numbers looks more difficult now than it did when Labour was in opposition.

But he reckons changes to planning reform, the introduction of the New Homes Accelerator and changes at the top of Homes England will all enable government to hit that target, provided, of course, there are no economic shocks.

Nice get-out clause.

But economic shocks aren’t going to be the only thing that stops that number being reached, are they? There are plenty of other reasons we’re never going to deliver on that target.

Take the latest building fire safety rules. No one is denying we need to ensure that the places we build are safe, particularly in a post-Grenfell world. But viability remains one of the biggest barriers to development and putting more pressure on margins for developers is only likely to see them retrench rather than accelerate development.

The numerous buildings that have been found to have dangerous cladding do need to be fixed and deadlines do need to be put in place, but to be able to deliver everything, something has to give somewhere else.

Real estate is in the midst of a capex supercycle, explained one major landlord to me. The level of costs that property owners will have to pay out to keep their buildings up to scratch is frightening, he said, and no amount of tinkering to the planning system is going change that.

So something has to give.

And this is where I get to be the broken record it feels like our sector may have become. If only government would listen to the needs of the real estate sector and fully understand what addressing those needs might enable it – the government – to deliver, then perhaps we could nudge closer to that 1.5m goal.

Until a system is created that makes it more viable for homes – traditional homes, BTR, mixed-use development – rather than just speeds up a planning system, then supersized delivery targets are never going to be met.

Perhaps as prime minister Keir Starmer figures out exactly how his missions are going to be put into practice, it’s time he sits down with the whole of real estate to understand what it really is that will enable it to build more, build better, build safer and offer a more affordable product.

Something perhaps for the fast-approaching January wish list.

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