Building 1.5 million homes will only ‘make a dent’ in housing crisis, warns Angela Rayner

Deputy prime minister Angela Rayner has admitted that Labour would only be making “a dent” in the housing crisis if the government hits its targets of building 1.5 million homes by 2029.

Housing secretary Rayner told MPs on the Housing, Communities and Local Government Committee that she didn’t see the government delivering 300,000 homes per year any time soon but still expects to hit the “stretched” target by the next election.

Labour has faced skepticism that it will hit the target since coming into power last summer. Annual housing supply in England increased by 221,070 additional dwellings in 2023-24 – including 198,610 new build homes – but that figure was down 6% annually.

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Gloomy forecasts remain in the short-term. The Home Builders Federation warned on Tuesday (7 January) of a record-low number of planning permissions approved between July and September last year.

A shortage of housing, particularly genuinely affordable social homes, has seen private rents skyrocket, unaffordable house prices and rising homelessness.

But Rayner was bullish over Labour’s ability to deliver 1.5 million homes after setting local authorities mandatory stretched targets of delivering 370,000 homes a year.

“Even with the 1.5 million homes target, that is a stretch target. I don’t lose. I hate losing. I’ve always been underestimated all my life and I’m determined personally not to lose this fight either.” Angela Rayner told MPs.

“But even if I and this government achieve this 1.5 million homes target it is a dent in what we need to achieve as a whole country to deliver the houses that we desperately need.

“We haven’t seen this level of housebuilding since the 1950s in the post-war and it is a similar challenge we face today to get that as well. I think they are achievable targets that we’ve set.”

Angela Rayner acknowledged that there is a crisis in terms of homelessness across the country and admitted that the fact around 160,000 children in England spent Christmas in temporary accommodation “makes her upset”.

However, the deputy prime minister was coy when quizzed on why she has not set a target for ending rough sleeping.

Rayner said: “I think it’s really challenging to set a timeline for it, in particular the challenges we face with the inheritance we’ve got at the moment and the projections for where homelessness is going.”

Last month Labour outlined plans to spend £1bn tackling homelessness and rough sleeping over the next year.

The measures included a shift towards preventing homelessness with a £192m uplift on the homelessness prevention grant as well as pilot schemes to reduce the usage of B&Bs to house homeless families.

She added: “Part of the problem is not just plugging the hole but it’s also the amount that’s coming in. 

“There’s a lot of work that’s going on that’s preventing but the sheer volume of people coming in you’re not seeing a reduction at the moment. The frustration for me is that the longer term problems around supply will keep us coming back to this point over and over again.

“We need to see a real dramatic increase in the supply of housing to reflect a net significant drop in homelessness because the pressures are so acute that more people are coming into the system as we can get out of the system.” 

Similarly, the housing secretary said it would be “foolish” for her to put a number on how many social homes would be built next year, arguing that delivery depended on local plans. But she did promise the “biggest wave of social and affordable housing for a generation”.

Angela Rayner was also reluctant to answer committee chair Florence Eshalomi’s question on whether the government assessed the impact of freezing local housing allowance rates.

Local housing allowance sets the rate of housing benefit low-income renters and the Tories unfroze the rate for the first time in four years in April 2024 to reflect the bottom 30% of market rents.

But Labour has opted to freeze rates once again this year, meaning the gap between benefits and rising rents will continue to grow.

Rayner instead said the government is taking a “number of steps to prevent homelessness” and said the “elephant in the room” is a shortage of social homes.

The housing secretary said: “There are a number of levers we are pulling at the moment that will hopefully start to turn the tide but it’s a bit like the Titanic, it’s not like the Hackney cabs that can turn really quickly. It will take more time in the early stages before we start to see the shoots.”

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