A year after the general election, what progress are we making towards 1.5 million homes?

Central to Labour’s general election winning manifesto was a commitment to deliver 1.5 million new homes by 2029. Within weeks of their victory, the new government began putting their plans into action, consulting on a new National Planning Policy Framework and a new formula for calculating housing targets both squarely aimed at achieving that goal.

One year on, recent headline data paints a bleak picture of progress. Last year, building started on just 107,000 new homes – 28% fewer than in the previous 12 months. The number of planning permissions granted in the first quarter of this year fell to a 20-year low, continuing a four-year downward trend. 

But changing the trajectory of housing development is like turning round the proverbial oil tanker. Those figures are a result of planning policies in place before Labour’s reforms were introduced. Forward-looking statistics give us more of a clue as to the impact of those reforms and provide more reason for positivity.

Although the tanker is beginning to turn, not everything is rosy

The Planning Portal – the webpage used to submit almost all planning applications – reports that permission for almost 72,000 new homes was applied for in the first quarter of this year, the highest first quarter number in three years. Deliveries of bricks – a forward indicator of construction activity – have increased by almost 9% compared to last year. Home builder Bellway recently forecast an increase in completions this year, on the back of strong spring sales.

But although the tanker is beginning to turn, not everything is rosy.

While housing targets have significantly increased, they need to actually be reflected in the planning system. The generous transition period to the new figures saw a rush of councils looking to lock in the older, lower targets. Forty seven local authorities are having their plans examined under those transitional arrangements, with housing targets an average of 34% below those that would be required today.

To put that number into context, just 52 authorities submitted plans in the three previous years put together. Those lower housing targets – and hence lower delivery – will be locked in for the foreseeable future as a result.

While the government’s overall objective is to simplify and accelerate the planning system, there are still policy requirements pulling in the opposite direction

As developers submit more applications and more requests for pre-application advice, resource constraints at local authorities are being magnified. Stories abound of developers waiting several months to arrange pre-application meetings, with the subsequent written advice being rushed and missing important consultee responses.

Applications are taking weeks to validate. Those delays will see decisions issued later and new homes delivered later as a result.

While the government’s overall objective is to simplify and accelerate the planning system, there are still policy requirements pulling in the opposite direction.

The Land, Planning and Development Federation has pointed out that surface water flood risk policy is delaying applications for 57,000 homes from just 20 of its members – across the whole development industry, the impact must be comparable with the nutrient neutrality debacle – despite the policy requirements delivering worse outcomes for flooding than those they replaced and being very easy to fix.

There is much similar grit in the system which could be removed to streamline processes without reducing the quality of outcomes.

Some of those obstructions will be dealt with by the slew of planning reforms that are still to come, like allowing planning officers to determine more applications without recourse to the planning committee, simplified application requirements for a new “medium development” category for sites of 10 to 49 homes, and the reduction in ecological survey work that will result from environmental delivery plans.

Those changes are all welcome but it will take time to deliver results. Environmental delivery plans, for example, will first need to be put in place by Natural England – until then, nothing will change. They are unlikely to have an impact on housing delivery during this parliament.

Starting from such a low base of housing delivery and given the time it takes for changes to translate into homes with people living in them, it was always unlikely that the target would be met

The introduction of spatial development strategies (SDS) – high-level plans dealing with regional-level issues such as the distribution of housing targets – are another change that is the right answer in the medium term. But, without robust encouragement from government, they are likely to impair housebuilding in the short term as councils delay local plans based on the new housing targets and choose to wait for the SDS to be completed first.

We are already seeing local authorities delay plan-making while they await local government restructures. SDS’s could see those same issues nationwide.

>> See also: Government should ditch 1.5m homes target, says Yorkshire Housing boss

Which all means that the target of 1.5 million homes by the end of this parliament is unlikely to be met. That does not mean the government isn’t doing the right things –  broadly speaking, it is.

Starting from such a low base of housing delivery and, given the time it takes for changes to translate into homes with people living in them, it was always unlikely that the target would be met.

Over the longer term we can be more optimistic. Local authorities will plan for more homes, more planning permissions will be granted, more homes will be built. While we won’t see 1.5 million homes by 2029, we will see an upwards trend and get closer to building 300,000 new homes each year.

The main risks to that outcome are political. As the next election draws closer and – despite increasing numbers of homes being built – as it becomes apparent the target will be missed, the government might try to blame the development industry and dust off hoary old policies and criticisms around land-banking that would actually serve to reduce delivery.

In a short-termist scramble for votes, the government could even row back on many of its reforms in the run-up to the next election, just as their Conservative predecessors did, and kill the housebuilding boom before it properly has chance to get started. That would be to everyone’s detriment.

The government has started well – now ministers need to see the job through.

Paul Smith is managing director at the Strategic Land Group