One subject looks set to dominate the agenda between now and the 2024 General Election and that’s housing. In light of this, the government’s new housing targets have become a significant focal point.
Most people accept we need more, but when and how should that be achieved? Where should they be built according to government housing targets? And what will it mean to buyers and sellers, landlords and tenants?
We’ve had many pledges over the years in terms of the housing market, but the government has just laid out its stall in quite a dramatic way.
Government housing targets proposals
It says it will prioritise new homes in city areas rather than the countryside and will simultaneously recruit and train more planners to speed decision making on new developments.
There will be more flexible planning rules to allow shops, takeaways, and betting shops to be converted into homes to rejuvenate the high street. Meanwhile, red tape will be cut to enable redundant agricultural buildings and disused warehouses to become homes, too, all in line with the government housing targets.
A review into so-called ‘permitted development rights’ will extend the size and kind of conversions and extensions. We ordinary homeowners can do without needing expensive and time-consuming planning consent.
This sounds like progress, but we’ve been here before of course.
Political parties of all colours have made these kinds of commitments for two decades or more. The government now says it’s about action and not words in relation to the government housing targets.
To that end it’s assembled what it calls a ‘super squad’ of planning and building experts and is sending them to Cambridge, where the government is promising a jaw-dropping total of 250,000 new homes in the next decade under the new government housing targets. This city is seen as a template of how other cities could expand to provide the houses and apartments that are needed.
Why politicians are taking government housing targets seriously
The rough and tumble of party politics will see a blizzard of housing targets, claims and counter claims between now and polling day. But beneath all the bluster there is a serious point – the current shortage of homes is driving up prices for buyers and renters alike.
Here comes some stats to prove the point – there are quite a few, but please stay with me!
The reality of the housing crisis
Government figures show that in 2022, in England, the average house price was £275,000. The typical annual household income was £33,000 – so houses cost 8.4 times income.
The situation is much worse in London where the typical property is 13.9 times average income. In the South East it’s 9.8, the East of England 9.3, and in the South West 8.9.
These are all way above the official ‘affordability’ threshold of just 5.0 times earnings.
The rental market has similarly shocking stats. Zoopla says properties let this summer are on average 10.4 dearer than those let in summer 2022.
Rents take up an average 28 per cent of a tenant’s monthly earnings. The highest proportion for a decade! And supply of rental properties is falling, at least slightly, as landlords sell up after a series of tax and interest rate rises make buy to let unprofitable. On top of all this, there’s the human cost. Figures for overcrowding are rising and new government data on homelessness show very nearly 80,000 households faced homelessness in England between January and March 2023 – the highest number on record.
Will new housing targets solve these problems?
The housing market is a complicated and slow-moving beast. Like all markets it operates on the principle of supply and demand. It’s undoubtedly the case that if there were more homes, that would have an impact on house prices, deposits, and rents.
New homes take many months, sometimes years, to build. So plans by this government or whoever may take over in 2024 will require a substantial period to come to fruition, as stipulated by the government housing targets.
But in the shorter term expect to see more extensions and conversions. These will be large scale (like former offices becoming homes). And small scale (there are rumours of the return of council grants to help individuals turns lofts and garages into bedrooms).
One thing’s for sure – it looks like cities will expand. More streets will have skips vying for parking spaces as individual homeowners are encouraged to create more space.
Will it all be enough to really make homes more affordable for all according to the government housing targets? Time will tell…
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Last Updated: August 16th, 2023