The target, previously mandatory, will remain but rather as “a starting point” with new flexibilities to reflect local circumstances, according to a statement published by Gove’s department yesterday (December 5).
Experts across the industry have labelled the move a “U-turn” which will “water down” the country’s likely annual residential construction output.
The result will be even higher house prices as increasing demand from net positive immigration and an ageing population continues to outweigh supply.Iain Crawford, AllianceExplaining his reasoning in a letter to MPs, Gove said there is no truly objective way of calculating how many new homes are needed in an area.
Business groups and councils had warned the UK government it would miss its 300,000 new home manifesto target, calling it an “unrealistic goal” for English cities.
More recently, Tory MPs have become divided on the issue.
According to the Financial Times, two tribes have emerged - one representing northern seats and keen to build more, and one representing wealthier southern constituencies keen to avoid ‘excessive building’.
The 300,000 new homes target was also facing other obstacles.
One was the government’s own environmental rules which seek to protect rivers and waterways from pollution by placing limits on development on protected sites in England.
Another was the revelation that due to electricity grids hitting capacity, areas as large as West London could be facing up to a 10-year new homes ban.
Gove has proposed new penalties for slow developers failing to build already-approved homes.
The levelling up secretary said while the UK has an “urgent need” to build more homes, its planning system “is not working as it should”.
He added: “If we are to deliver the new homes this country needs, new development must have the support of local communities.”
His department said housing targets remain an important part of the planning system and that it will consult on how these can better take account of local density.
The levelling up and gegeneration bill is currently making its way through parliament, and is set to go to the Commons next week.
Gove is currently in talks with the Competition and Markets Authority to develop a market study on the housebuilding market to guide the government with new recommendations.
Chief executive of real estate fund Alliance, Iain Crawford, said Gove’s decision to drop the target could see house prices climb again.
“Another day, another U-turn but this one is particularly serious in that in watering down the country’s likely annual residential construction output, thousands of would-be buyers and renters are going to have less choice of home,” said Crawford.
“The result will be even higher house prices as increasing demand from net positive immigration and an ageing population continues to outweigh supply."
James Forrester, managing director at Stripe Property Group, went as far as to call the move “astonishingly negligent”.
He went on: “House building has languished below the required 300,000 annual number since the 1950’s and that’s even with the focus and accountability of local authority facing targets.
“To remove those targets is to allow the UK’s requirement to dangle in the wind and we now have even less chance as a nation of providing adequate dwelling numbers.”
The Department for Levelling Up, Housing and Communities was approached for comment.
ruby.hinchliffe@ft.com
