Key facts
- Barratt Redrow and retailers are urging tax cuts and deregulation to boost the UK housing market.
- The UK faces a severe housing crisis with unaffordable rents and prices far exceeding earnings.
- Labour's target of 1.5 million new homes is unlikely to be met with current building rates.
- Andy Burnham has pledged a large council house building program but lacks specific details.
- Greater Manchester's housing delivery rate under Burnham was mixed, with the city itself performing better.
- Factors like high mortgage rates, labor shortages, and material costs impede private development.
Homebuilders Barratt Redrow and retailers, led by the BRC, are urging the incoming Prime Minister, Andy Burnham, to implement tax cuts and reduce regulatory burdens to stimulate the UK's struggling housing market. The UK is grappling with a severe housing crisis, characterized by unaffordable rents, lengthy waits for social housing, and prices that are nearly eight times average earnings.
Labour has committed to building 1.5 million new homes during its term, but current construction rates are significantly below this target. In the twelve months to March, only 204,000 new homes were delivered, far short of the approximately 300,000 needed annually. While Burnham has spoken of a major council house building program, specific details remain scarce. His past record as Mayor of Greater Manchester shows mixed results, with the city itself performing better in housing delivery than the wider region.
Analysts suggest that while government planning reforms may help in the long term, immediate challenges for private developers include high mortgage rates, a shortage of skilled labor post-Brexit, and increased construction material costs. To significantly boost social housing, an additional £13 billion per year in state subsidies may be required. Burnham has indicated a plan to utilize vacant public land to lower costs, though analysts caution about the practical challenges of such initiatives. Ultimately, addressing the crisis will likely require a substantial increase in both social and private housing construction.