Britain’s housing industry has for several years been suffering from a fundamental problem: there isn’t enough supply to meet demand. This, along with low interest rates, has helped to drive up prices. While the Bank of England might have recently pushed up the interest rates, the housing supply remains fairly constricted.
To help remedy this, the UK government set a target for the construction of new homes. 300,000 of them were to be built annually, right up to the middle of this decade. This was the result of a pledge made in the 2019 Tory manifesto, which promised ‘at least’ a million more homes over the current Parliament.
These plans were scuppered, in part, by a backbench revolt in 2022. As a result, local councils have the ability to take into account the density of the existing housing stock, as well as the character of the area. In other words, local authorities won’t be forced to build where they’d really rather not.
This reflects wider Tory discontent at the targets, which were described by onetime Prime Minister Liz Truss as ‘Stalinist’. In reality, the housing numbers have fallen some way short of the target, peaking at just under 250,000 in 2020.
Environmental Targets for New Builds
New builds in the UK are bound by another set of government targets: the environmental ones. The UK government has pledged to reach Net Zero by 2050, and to that end it has insisted on a range of new environmental targets for new builds.
By 2025, new homes will have to comply with something called the Future Homes Standard. This aims to decarbonise the incoming housing stock through efficient heating, waste management and hot water. Triple-glazed windows, heat pumps, and substantial materials will all play a role in shaping the house of the future.
According to the Home Builders Federation, the supply of new housing will likely plummet to less than 120,000 in the years to come, thanks to ‘an increasingly anti-development and anti-business policy environment’. This analysis is contested by the Department for Levelling Up.
The continuation of the current housing policy will hinge upon the outcome of the next election, which is overwhelmingly likely to arrive before 2025. What changes are proposed by an incoming Labour government, or a defending Conservative one, remains to be seen.
While the OBR has projected that the UK will avoid recession this year, the pressure on homeowners will still be considerable. For those without the means to get onto the housing ladder, the situation is unlikely to improve in the near future.
