Housing Secretary Michael Gove says the government is still committed to their manifesto pledge to build 300,000 new homes annually.
This marks a sea change from Liz Truss’s dismissal of “Soviet-style targets.” Last month, Advantage wrote that according to the Guardian, “government sources said the target of building 300,000 new homes a year by the mid-2020s had quietly been abandoned.”
The government is grappling with ambitious housebuilding targets
However, following Gove’s return to the Cabinet as the Levelling Up, Housing and Communities Secretary, last week, the government is once again grappling with their ambitious housebuilding target.
Property Industry Eye said Gove told the BBC that he wanted to build more new homes – both for ownership and to rent. However, he warned that meeting the target would be “difficult” due to the economic circumstances.
He said: “We need to be straight with people: the cost of materials has increased because of the problems with global supply chains and also a very tight labour market means that the capacity to build those homes at the rate we want is constrained.”
Asked about Truss’s past comments on housing targets, Gove continued: “The top-down housing targets that… Liz was referring to are part of a broader and different calculation from the 300,000 in the manifesto.
“My view is that what we do need is a fair way of allocating housing need that takes account of changes in population.”
Most young families are priced out of the housing market
According to the Resolution Foundation, even if house prices fell by 18 per cent – Lloyds Bank’s worst-case scenario – nearly three-quarters (73 per cent) of young (25-to-34-year-olds) non-home-owning families would still have neither the savings nor the earnings to be able to purchase a house.
And with rents for new private tenancies rising by 10 to 12 per cent over the year to July 2022, many young people may not have the capacity to increase their savings to take advantage of falling house prices.
Advantage’s view: As we wait to hear the details of the new budget on 17th November, which is intended to “cut public spending on a sustainable footing, get debt falling and restore stability,” you would need to be wildly optimistic to hope for a public housebuilding bonanza amidst the likely cuts. However, those within the construction industry may take a small amount of comfort from seeing that housebuilding targets have at least been reinstated. Whether those targets are hit is, of course, a different question.