Can Angela Rayner’s Housing Plans Solve the Supply Shortage?

It’s been great to have attention on improving housing supply via the promise of 1.5m new homes from Angela Rayner.

We do need to increase supply, and it’s a relief to have politicians’ promises that acknowledge this rather than trying to influence demand, to solve a supply problem.

Grey belt building is a sensible idea, too.

It’s unclear how many people believe the 1.5m new homes is a deliverable promise on a practical level, for many reasons, one being how challenging it is to build right now. The developers I speak to tell me they need to deliver a minimum 35% return on cost to access funding, which is not easy in a high cost environment.

It’s also unclear what the strategy is for aligning housing policy and immigration-related policy. It’s not my place to comment on immigration policy, but what I do know is that effective housing policies have to align with it in order to be effective.

I talked on a weekend breakfast show about some of this, including the scrapping of the proposed ‘UK connection test’. The idea was that people needed to be resident in the UK for 10 years to be eligible for social housing. In scrapping it, the result will likely be an increase in demand for social housing. Again, I’m not making any value judgements — but it is important to point out that if you increase supply by the same amount as you increase demand, you don’t address the shortfall — currently 1.3m households waiting for council homes.

Overall, some things I’d love to see in housing policy:

• Have housing policy focused over the longer term — to align with average life expectancy of 87–90 years rather than political cycles — though I acknowledge that this is unlikely.
• Have a clear priority/set of priorities for housing policy.
• Have some acknowledgement of the significance of ~1 million empty, and many more under-used homes, which need to be upgraded to modern standards and green credentials, and would be a much faster, lower risk method of helping fill the shortfall of housing we have.

Click below to watch the full interview (from 1:30:29)