The government’s housing strategy needs to inspire confidence in a daunting context

The government’s forthcoming long-term housing strategy is a huge opportunity for it to set the agenda for the next five years, and possibly beyond. But it is not the first to have bold plans on housing and, as our recent report examined, successive governments have missed their housebuilding targets. Setting a robust strategy will be key to avoiding the same fate, and implementing reforms that stick.

The new housing strategy should define success and set a clear direction

Beyond general notions of increasing supply and improving affordability, few governments over the past two decades have adequately specified what outcomes they want from their housebuilding programmes and why – such as where they want new homes to go nationally, and what tenure mix they want to end up with.

Without this clarity, reform programmes have lacked drive, direction and clear success metrics (beyond housing targets). They have also lacked credibility. The housebuilding industry has not had a clear long-term trajectory to confidently invest in, and instead has been buffeted by constant policy churn. This has been made worse by inconsistent leadership. In recent decades housing policy has rarely featured in prime ministers’ top priorities, while housing ministers have been notoriously short-tenured: the last 10 have spent fewer than nine months in post.

So the government’s upcoming strategy is an opportunity to go beyond this summer’s broad manifesto promises and nail down what success looks like for its housebuilding programme. It should use the strategy to set clear objectives, including a 10-year vision for what housing outcomes it wants to achieve.

These objectives need to be realistic. We recommend that the government publishes analysis setting out – all things being equal – how it expects its policy programme to affect key outcomes such as housing availability and affordability, compared with a counterfactual where housebuilding rates are lower and the tenure mix stays the same.

The strategy should offer a roadmap for reconciling policy objectives

Successive governments – of all stripes – have failed to reconcile their housebuilding objectives with other important policy objectives affecting development, like building standards and environmental regulations. Indeed, these have often undermined each other where, for example, regulations conflict or remain unclear, increase building costs at short notice or create bottlenecks in planning authorities without the capacity to process their administrative requirements.

The government must engage with these trade-offs and set out how it plans to take forward its commitments to housebuilding, the environment and building standards in a coherent and joined up way. To achieve this, it could commission an environmental regulatory body (such as the Office for Environmental Protection or the Environment Agency) and housing delivery experts (such as Homes England, industry stakeholders and/or regulation experts like the Future Homes Hub) to conduct a joint urgent review into how to combine higher building rates with better environmental outcomes.

The strategy should set out a credible path to delivery

The government has committed to delivering 1.5 million new homes in the next five years. That will require a rate of building not seen since the 1960s. It has been bold elsewhere too, stating that it wants new homes to come with the infrastructure that local areas need, and promising the “biggest increase in social and affordable housebuilding in a generation”. Both will require increased investment, whether from the government, the private sector or from lowering land values.

The government has taken important first steps to setting a better housebuilding record than its predecessors, including proposing reforms that it says will get enough new homes through Britain’s planning system. But the delivery challenges remain daunting.

The housing market is in a downturn. Developers are facing a toxic combination of high interest rates preventing first-time buyers entering the market, while materials and labour shortages and new regulations – from post-Grenfell fire safety regulations to Biodiversity Net Gain to the 2025 Future Homes Standard – add to building costs. Likewise, social housing providers are struggling with uncertain rent settlements, difficulties getting private finance in a high interest-rate environment, burgeoning maintenance bills and the costs of new regulations.

Meanwhile, speeding up planning decisions will rely on both streamlining planning authorities’ processes and translating the government’s proposed increase in planning fees into improved recruitment and retention. Neither will be easy.

The government needs to navigate these challenges to avoid them becoming major blockers. We recommend that its long-term strategy should include a five-year delivery plan, setting out what it expects to deliver in this parliament and how.

The government must prepare to course-correct when needed
No matter how good the government’s ‘Plan A’ is, several factors could throw its housebuilding programme off course, or indeed offer opportunities to progress it faster or more cheaply. Most notably, the UK’s future economic growth and interest rates will make a big difference to housebuilding numbers.

We recommend that the government’s long-term housing strategy includes plans to monitor and evaluate progress against its objectives. It could, for example, commit to producing regular stocktakes that assess progress, identify current and emerging delivery risks and opportunities, and prompt the government to course-correct where needed.

The strategy is a chance for Labour to put its bold plans into action
Starmer’s government is not the first to enter office promising bold action on housebuilding. For it to become the first, for some decades, to get it right and deliver a programme that works will require a clear, robust and credible strategy. This is what it should be working to produce.

For the Institute for Government’s full analysis on how the government can meet its housebuilding targets, read From the ground up: How the government can build more homes.