The Government is promising radical action to tackle Britain's housing crisis and to get vital infrastructure built
Why is this an important issue?
It is well known that there is a damaging shortage of housing in Britain, and particularly in England, which has led to soaring house prices and record rent rises. Both main parties estimate that at least 300,000 homes need to be built per year in England; last year, just 158,000 were completed. There is also a growing awareness that the UK's planning system is gummed up. In the words of one recent essay, "the most important economic fact about modern Britain" is that "it is difficult to build almost anything, anywhere". The UK hasn't built a reservoir since 1991, or finished a new nuclear power station since 1995. HS2, way over budget and partially scrapped, will be the first new inter-city railway line since the 1800s. Trying to build anything, from housing estates to data centres to power pylons, is complex and expensive. This has many knock-on effects. Britain now has the most cramped new houses in Europe. Workers cannot move to the UK's most dynamic cities. Badly needed investment in housing, transport and energy is stymied. It has clearly made Britain poorer.
Why is the planning regime so complex?
It is rooted in the 1947 Town and Country Planning Act, which in effect nationalised the right to build on land. Before then, landowners could do as they pleased within broad rules; but ever since, control has largely resided with councils, which make decisions on a case-by-case basis, guided by "local plans", which set out the rules for development. Britain is unusual in this respect – most comparable nations have zonal systems, which mean that developers are all but guaranteed to be granted permission to build if they meet certain criteria. In many cases, developments are blocked by councillors who fear the wrath of local voters. The difficulties are compounded by additional planning regimes such as the green belt; by complex environmental rules that allow Natural England and other bodies to block developments; and by the risk of judicial review.
What costs does this impose?
The application process for the Lower Thames Crossing has cost £297m – more than it would cost to actually build such a tunnel in most countries. HS2 is costing four to eight times per mile more than comparable high-speed rail lines in France and Italy; among other expensive mitigation projects, it is having to build a £40m bat protection tunnel near Buckingham. A housing development in Watford was refused in 2021 because it had "moderate potential" to harm bats, despite no evidence of the mammals' presence. The proposal for reopening the nine-mile branch railway line from Bristol to Portishead has 17,912 pages on the environmental impact, including 1,174 on bats and 215 on newts.
What is Labour doing about this?
It has pledged to build 1.5 million homes in the next five years (370,000 per year). Keir Starmer's Government has already taken some concrete steps: for instance, ending a de facto ban on new onshore windfarms. It has also published a new draft National Planning Policy Framework (NPPF), which would restore mandatory housing targets – forcing local authorities to plan for a certain number of homes per year, as a percentage of existing stock. It would also review green-belt boundaries to allow new homes to be built on lower- quality "grey-belt" land. In addition, ministers have announced plans to fund 300 more planning officers; to establish a national task force to "unblock" big developments that have stalled; and to pass a "planning and infrastructure act" that would streamline the planning system. At a later date, Labour wants to build "a new generation of new towns".
Will these reforms work?
The industry approves: they were endorsed by all 11 major housebuilders, and by developers and investors in the sector, as well as by planners', architects' and surveyors' bodies. Critics, however, say that they are insufficiently radical, at least in the absence of further structural reforms. And obviously output depends less on what politicians want than on what the construction industry does; it reduces output significantly when demand is low – as it has been in recent years because of high mortgage prices. Developers build according to the "absorption rate": how many homes can be sold into a market without overwhelming demand. The indications are that 2024 will be a bad year; planning approvals in England are at the lowest number since records began in 1979.
And will the reforms be popular?
Among many, not at all. The 1947 Act has its critics, but it has protected the British countryside in a nation that has very limited space, and prevented urban sprawl of the kind seen in, say, Ireland; over the decades it has forced the regeneration of bombed-out city centres which otherwise might have decayed, as in so many American cities. And it enshrines an admirable principle: local democratic control of the majority of planning decisions.
So why push for change?
Local communities bear the costs of new developments: disruption, noise, the transformation of cherished landscapes; and except for the landowners, they receive few benefits. As a result, they tend to almost invariably oppose development. On the other hand, the kind of people who would benefit from it – young families looking for affordable housing, for instance – have no voice in the planning process. Ultimately, there is a political calculation to be made. The Conservatives repeatedly bowed to what are often called Nimby interests. But Labour, whose huge majority is mostly made up of MPs with constituencies outside the green belt, has made the opposite calculation: that by making housing more affordable, and boosting the economy, it will improve rather than undermine its electoral prospects.
The green belt and the grey belt
Queen Elizabeth I drew a three-mile ring around London to prohibit development of land not already built on. In 1875, Octavia Hill, the social reformer and co-founder of the National Trust, coined the term "green belt", to promote the preservation of an area of countryside around the capital. The 1947 Act legally enshrined the green belt and its purpose: to check urban sprawl and protect the countryside from urbanisation. In 1955, it was rolled out nationally. Today, there are 14 of these rings around English cities, covering some 13% of England (about 1.6 million hectares). The green belt remains popular among voters (a clear majority favour strict limits on planning permission there), but it is also consistently cited as a cause of Britain's failure to build more homes. The Centre for Cities think-tank estimates that if just 2% of the green belt around the five biggest cities were developed, it would be possible to build two million homes within half a mile of railway stations. To square the circle, Labour has endorsed the idea of building on the "grey belt": green-belt land that was previously developed, or which for one reason or another – low biodiversity, say – doesn't enhance the green belt. Expect public rows and legal battles ahead.