Abandoned Housing targets undermine New Supply

The abandonment of house building targets could not have come at a worse time. There is already evidence that local authorities are scaling back on plans and NIMBY-dominated councils now have even more leeway to stop any new homes being built, which they are making good use of. A weakening economy, reflected in a faltering for-sale market, will see volume house builders–the main source of new supply–reduce development activity. Giving local authorities greater freedom to block new housing will further reduce incoming supply, worsening housing affordability [...]

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Mary-Anne Bowring: Abandoned housing targets undermine new supply just as we need it most

The Dangers of Reducing Housing Supply Amidst Rising Demand

As house prices continue to soar and the rental market tightens, the lack of new housing development creates a widening gap between supply and demand. Local authorities’ ability to block new housing developments, exacerbated by the abandonment of national housing targets, threatens to worsen the ongoing affordability crisis. The inability to meet these housing needs places even more pressure on existing stock, driving up prices and rents and making it harder for younger generations to get onto the property ladder.

Impact on the Housing Market and Economic Growth

The economic implications of reducing housing supply are severe. With fewer homes being built, demand for existing properties is likely to outpace availability, leading to continued price inflation. Not only does this impact prospective buyers, but it also exacerbates the housing crisis for renters. Additionally, reduced housing development can have broader economic consequences, such as slowing job creation in construction and related industries, potentially leading to an overall economic downturn.

How Local Authorities Could Benefit From a More Supportive Approach

While local authorities have long held significant control over housing developments, it’s important to consider how a more supportive approach to housing targets could benefit both the local communities and the broader economy. Collaboration between central government and local councils could help streamline the approval process, ensuring that sufficient housing supply meets the needs of growing populations without compromising on quality. Finding common ground between local concerns and housing needs could help reverse the trend of blocked developments and ensure that more homes are built.

The Way Forward: Rebuilding Housing Targets and Ensuring Future Supply

To address the critical shortage of housing, the government must reconsider its approach and rebuild housing targets to incentivize local authorities to prioritize new development. Not only would this address the immediate needs of housing demand, but it would also ensure that economic growth is sustained. Policies must be put in place to ensure that development is not obstructed by local opposition but instead focused on solutions that balance growth with community needs. A concerted effort from both government and local authorities is essential to prevent further deterioration of the housing supply and ultimately address the affordability crisis.