The next government will have to find some extra cash to spur construction of new affordable homes, a think tank has warned, or risk missing its housebuilding targets.
Both major parties included ambitious targets in their manifestos, reflecting the growing political salience of the housing crisis. Alongside measures to support first time buyers, the Conservatives have pledged to deliver 1.6m new homes by 2029 while Labour committed to 1.5m new homes over the same time period.
Young people, in particular, are struggling to get onto the housing ladder, with rents swallowing up a large share of income while house prices keep on rising.
Research from the Resolution Foundation shows that the share of families headed by someone aged 19-29 that own their own home has more than halved compared to its 1990 peak, at 12 per cent.
This will require at least 300,000 houses to be built per year. The latest available figures show that only 234,000 new dwellings were completed in the 2023 financial year, which was little changed on 2022.
The last time the UK came close to these figures on a sustained basis was in the 1970s when around 250,000 new homes were built annually.
Both main parties have said they ramp up levels of housebuilding through reform of the planning system. Labour plan to reform planning rules to allow construction on some so-called ‘grey belt’ land.
This new category will include “poor-quality scrubland,” Labour has said.
However, the Resolution Foundation noted that back in the 1970s, local authorities and housing associations played a crucial role in building new houses. They contributed 45 per cent of all new homes built.
During the 2010s, in contrast, local authorities and housing associations contributed to just one in five new homes built when the average number per year was just 136,000.
Neither party has committed any extra funding to boost housebuilding numbers, which will make it difficult to reach the target.
“The lack of new funding for affordable housing will make it extremely challenging for either of the main parties to get remotely close to their housebuilding targets,” the Foundation said.
“Britain’s new housing consensus desperately needs new cash for it to deliver,” Cara Pacitti, senior economist at the Resolution Foundation, said.
“Whoever wins the next election will struggle to hit these stretching targets without significantly more funding in place to boost affordable house building, and to support low-income families with rising rents,” Pacitti added.