Government scraps housing supply targets

Demand for new homes is rising across the country as we face a serious housing supply crisis. Tenants (and potential tenants) are struggling to find suitable homes in the competitive rental market - A particularly concerning issue for those specifically seeking affordable accommodation.

These housing supply challenges have considerable impacts on the choices available to renters, which can often lead to a reduced quality of living. Private rental shortages can lead to:

• Household overcrowding
• Tenant insecurity
• Tenants accepting low quality living standards due to lack of suitable choice
• Nationwide homelessness increase
• Impaired labour mobility
• More pressure on buy-to-let landlords to deliver suitable affordable housing options

Research by the National Housing Federation (NHF) has concluded that the UK must build close to 340,000 new homes per year to avoid worsening the already serious supply crisis. NHF also estimated that 145,000 of these new homes must be classed as ‘affordable housing.’With supply not matching demand for renters seeking new homes, the search for new accommodation is growing increasingly competitive for tenants. However, the supply crisis also has detrimental effects on landlords, particularly new landlords entering the market or those hoping to expand their portfolios with new properties in 2023. Just over ten years ago (August 2012), the average house price in England was £180,000, since then we have seen the average house price for the country increase by a shocking 76%. In order to provide better supply of rental accommodation to tenants and to take control of the increasingly competitive buy-to-let market, the government set targets in the Renters Reform Bill to build 300,000 new homes per year.

Housing targets scrapped

60 conservative rebels have pledged against mandatory housing targets to build 300,000 new homes per year. In response to the cabinet backlash, Sunak has now confirmed that the mandatory housing targets will be eased, and instead will be treated as ‘advisory’ with more regional flexibility. Responding to the changes to these targets, Michael Gove (Secretary of state for Levelling up housing and communities) stated “there is no truly objective way of calculating how many new homes are needed in an area” but the “plan-making process for housing has to start with a number”.