Contribution
My Lords, I thank my noble friend Lady Eaton for giving us the opportunity to debate the issue of home ownership and the Government’s record on housing delivery. I will focus on one or two areas. One is about family housing, the other is about the current housing crisis and supply and demand, and a few practical solutions to the current malaise.
I will not rehearse the comments I made at Second Reading of the Social Housing Bill on 1 June. Suffice it to say that there is little evidence that the Government understand the need to support more home ownership for families and have failed to address, via regulatory policy or legislative changes, the economic and social impact of falling birth rates. What we saw in that Bill was a spiteful ideological assault on right to buy, which will be all but scrapped by raising the required tenancy length and eligibility and reducing the discount to 5%, which will lock 600,000 potential householders out of the scheme. A future Government will and should reverse this pernicious and incoherent policy.
There is no doubt that the Government’s housing record is lamentable. Nationally, housebuilding starts are at a 12-year low. There were 261,000 housing starts in the last 18 months, compared to the implied target in the Labour Party manifesto of 525,000. Bloomberg predicts a shortfall of between 90,000 and 100,000 starts each year between 2026 and 2029.
The situation under Mayor Khan in London is even worse—indeed, it is dire. In quarter 1 of 2026, 6,325 homes were started, just 7% of the mayor’s target. Some 22,000 homes are unsold or under construction. There is no way that the Government’s annual target, which is broadly supported on both sides, will be achieved to meet their 1.5 million homes aspiration. Are we surprised, given the Government’s mishandling of the economy? We have the highest energy costs in Europe, and there are labour shortages and increased inflationary pressures on materials. Higher national insurance contributions, a higher minimum wage, rising taxes, increased borrowing and mortgage rates have all contributed to and exacerbated what Savills has described as a “particularly gloomy” outlook for the housing sector.
On the supply side, the Government’s planning reforms are, to be fair, a small step forward in the right direction, but no more than that. I welcome some aspects of the revised NPPF. Under the NPPF changes, faster infrastructure consent was brought into force in August. There was a redesignation of low-quality green belt and a focus on brownfield and transit land sites, but it is simply not enough to overcome the inherent viability squeeze on new building sites. Planning hold-ups, long decision times, biodiversity rules, nutrient and water neutrality conditions, infrastructure levies, tighter building standards and the forthcoming building safety levy—due later this year—all mean that land which is viable and buildable on paper cannot and will not be developed profitably. The Government should address that.
In addition, we have one of the highest levels of affordable housing targets in the western world. It is much higher than most of the developed world. That means that sites are land banked and lie idle and undeveloped. We need to look at this 40% to 50% figure again, because it is not delivering housing that we need.
The Government have also failed to look at demand. Only 27% of tenants in social rented accommodation are in work, so the Government intend to borrow £39 billion for their social and affordable homes programme to build more properties to warehouse welfare—a direct capital transfer from business, working people and pension funds to the workless, who will continue to receive benefits. This is economically insane and unsustainable. Immigration and welfare are integral to better housing policy. We must look again at prioritising working families and young people. It is a badge of shame that in 2021, over 100,000 social lettings in London were held by foreign-born tenants. It is indefensible and offends against fairness, efficient resource allocation and social equity, and it is a breach of the social contract. The figure is 12% across the whole of the UK.
In conclusion, a future Conservative Government—or, indeed, perhaps even a Reform Government—should cut taxes for SME builders, which suffered so grievously in the downturn in 2008-09. We must reduce regulations; establish a sovereign wealth fund to build new houses; give priority to families, married couples, veterans and young working people; restore right-to-buy eligibility post ante; and relaunch the coalition Government’s very successful new homes bonus policy. The present Government’s anaemic policy response will do nothing to tackle this grievous housing crisis and build enough homes. Much more radical change is needed.