Rishi Sunak’s latest plan to spur UK house building was met with skepticism by developers and sparked a public internal row in the Conservative Party, highlighting a tricky political headache for the British prime minister.
(Bloomberg) — Rishi Sunak’s latest plan to spur UK house building was met with skepticism by developers and sparked a public internal row in the Conservative Party, highlighting a tricky political headache for the British prime minister.
Housing Secretary Michael Gove on Monday set out a package of measures, including regenerating brownfield sites, simplifying the planning process and pursuing a major new development in Cambridge. But developers warned his plans will have little impact and a local Tory MP whose South Cambridgeshire constituency flanks the city on two sides opposed the proposal.
“I will do everything I can to stop the government’s nonsense plans to impost mass housebuilding on Cambridge,” the MP, Anthony Browne, said on Twitter, citing a lack of water supply. “Unless the government can say where the water will come from, its plans are dead on arrival.”
The backlash highlights the challenge Sunak faces to deliver a 2019 election pledge to build 1 million new homes by the next election and ramp up annual housebuilding levels to 300,000. With Britain facing an acute housing shortage that’s fueling rising rents and exacerbating a cost-of-living crisis, the premier wants to demonstrate progress to voters while keeping his own MPs on side — many of whom represent rural seats where there is stiff local opposition to development.
Read more: Tories Urge New Sunak Strategy, Cabinet After Election Losses
Sunak has a history of deferring to rebellious Tory MPs on the issue. In the face of a backbench revolt last year, his government removed mandatory house-building targets for local authorities, a move that’s sparked concern that the aim of building 300,000 houses a year by the mid-2020s won’t be met.
“The proposals do little to address the major reasons why housing supply is falling,” Stewart Baseley, executive chairman of the Home Builders Federation, said in an e-mailed statement. He added that the government should “reverse the proposals to weaken the planning system that has now seen 59 local authorities withdraw their housing plans.”
According to Gove’s department, 687,000 homes have been built since 2019 — and the government remains committed to both its 1 million-home target in the current Parliament, and the wider goal of getting annual new builds up to 300,000.
Some 205,000 new homes were completed in the year through March 2022, according to the most recent data available from the Office for National Statistics, showing ministers still have some way to go to achieve that. The last time more than 300,000 were completed in a year was in the late 1970s.
The housing dilemma also exposes Sunak’s political challenge of satisfying two core parts of his electoral base. On one side he faces the threat posed by the Liberal Democrats in many wealthier and rural southern seats, where the Lib Dems often seek voters’ support by opposing building developments. But he also faces a challenge by Labour in many so-called Red Wall seats in former industrial heartlands in northern and central England that swung Tory in 2019, where extra investment and redevelopment is often welcomed.
After delivering a speech outlining his plans on Monday, Gove was pressed on whether he’d be willing to force developments through despite local opposition. He replied that he wanted to work with communities and get their consent.
“I believe in taking people with us,” Gove said. “We will look at what the most appropriate delivery vehicle is.”
UK house-builders, for their part, face challenges including staff shortages in planning departments — which slow down approvals for new developments — persistent high inflation, which has pushed up construction costs, and rising mortgage rates, which suppresses demand.
“The announcement falls short of providing immediate solutions to the growing challenges facing an industry under siege,” said Marc Vlessing, chief executive officer of London-based developer Pocket Living. “We need housing today, not tomorrow.”
–With assistance from Damian Shepherd and Lucy White.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.