britain’s housing crisis: a recap

8.5 million people in England can’t access the housing they need. People are facing huge challenges accessing and maintaining affordable and decent homes that meet their needs. In 2021/22, more than 4 in 10 social renters and around a third of private renters were in poverty after housing costs. And housing pressures are not just affecting renters – currently, the average two-year fixed mortgage rate is 5.79% compared to back in December 2021, when the Bank of England’s base rate sat at 0.1%.

Tasked by Housing Secretary Michael Gove in February 2023, the Competition and Markets Authority released a report focusing on Britain’s housebuilding industry alongside concerns about decades of failure highlighted by the watchdog. The study recorded a list of criticisms directed at developers, blaming the poor quality of new houses, excessive fees, and inescapable management schemes. The CMA stated there has been a failure to build enough homes in the areas needed most and the levels of innovation in the industry are ‘lower than expected in a dynamic, well-functioning market’.

Perhaps unsurprisingly then oppositional leader, Keir Starmer made his move last week with the Labour Party’s soft manifesto reiterating promises Starmer made back in October 2023 to build 1.5 million new homes. The manifesto claims it will be the ‘biggest boost in affordable homes for a generation’. However, it won’t be an easy task as 1.5 million new homes average to 300,000 new homes a year for the next five years, and it especially won’t be achievable with the current overcomplicated planning system. But Starmer has previously promised to “bulldoze through” planning laws and in Labour’s new manifesto, Starmer claims to provide planning passports for urban brownfield delivery and 300 new planning officers across the country in a ‘housing recovery plan, a blitz of planning reform to quickly and materially boost housebuilding, delivered in our first weeks and months in office.’

Starmer’s promises echo those laid out by the Conservatives in their 2019 election manifesto – promises that have never been met. In 2023, Britain built 234,000 new homes, more than they’ve built in the last four years, yet still well under the Government’s 300,000 per year target. The industry has expressed disappointment in the Conservative Party over a lack of significant housing and planning measures which recently peaked when Chancellor Jeremy Hunt failed to mention any during the latest Spring Budget. The industry was optimistic about receiving more incentives for first-time buyers, such as Help to Buy or a similar scheme as this initiative had previously worked well. Between 2013 and 2019, profits were particularly high, partly due to the Help to Buy scheme which supported the sale of new homes from 2013 until last March, when the scheme expired.

The CMA also found that the planning system was one of the key factors slowing down housebuilding and they highlighted three key areas of concern in the planning system: uncertainty, the length and cost of the process, and the lack of clear objectives for local authorities. For perspective, the number of planning approvals granted between July and September last year was nearly half that at the end of 2016. The CMA stressed that this has had a disproportionate impact on smaller developers as the largest 11 housebuilders in Britain built 40pc of all new homes in 2021/22.

For too long, the government has attempted to fix the housing crisis with piecemeal approaches, but with the upcoming election, could it all be about to change? The Conservative Party’s grip on office is loosening, partly because they have failed to solve the crisis after 14 years in power and their sway with young voters has fallen. With the current cost of living crisis that has affected so many since 2021, it’s unsurprising that Labour has been consistently ahead in the polls since the start of 2022. It’s also worth looking at what the Liberal Democrats are planning ahead of the next general election, after all, if things are tight between the Conservatives and Labour, they could be used once again as part of a coalition. The Liberal Democrats have stated that England’s housing market is ‘profoundly unfair’ and promise to provide for the needs of everyone by delivering 150,000 homes a year by the end of the next parliament. With all the promises being made, all we can do is hope that the next elected government will push through and finally fix Britain’s housing crisis.