Government housing plans could make half a million homeless

More than half a million more people will be made homeless by 2030 if government planning changes have the predicted effect and reduce the number of homes built every year, Labour has warned.

Experts from housing consultancy Lichfields expect the government proposals to scrap top-down housing targets and introduce other changes to the National Planning Policy Framework will mean 77,000 fewer homes are built every year.

With the government previously struggling to hit the target of building 300,000 homes per year and planning applications falling to record lows alongside surging mortgage rates, Labour has warned rising homelessness is on the horizon as the housing crisis deepens.

The Lichfields analysis found fewer homes could lead to 580,000 more sofa surfers, 13,400 more people falling into homelessness and 137,000 additional households on social housing waiting lists.

“Hundreds of thousands more households are at risk of being unable to afford a place to call home because the prime minister put appeasing his own MPs ahead of building the homes our country needs,” said Lisa Nandy, Labour’s shadow housing secretary.

“While Rishi Sunak stands on the sidelines with his fingers in his ears, Labour has a plan to start fixing the housing crisis.”

The Conservatives’ planning changes focus on local plans to address housing needs. They promise to give local communities more power to have a say on what is built and where.

Planning policies will also prioritise building on brownfield land with greater protections for the green belt – an issue that proved controversial among backbench Conservative MPs.

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The planning changes are set to be introduced alongside the Levelling Up and Regeneration Bill, which is currently being discussed at the report stage in the House of Lords this week having previously cleared the House of Commons.

Speaking at the Liaison Committee last week, Rishi Sunak said it was “important that the planning system has the confidence of local communities.”

The prime minister added: “We are reforming how the planning system works to strengthen the neighbourhood plans, which have shown they can deliver the housing people need in their local areas but they do so in a way that has the consent of the community which is important.”

However, analysis from Lichfields claimed the new rules would see 77,000 fewer homes delivered each year with a huge social impact.

The housing consultancy said there would be an increase in the number of concealed households with 580,000 extra people forced into hidden homelessness, also known as sofa surfing. That would be a 30% increase taking the number of concealed households up from 1.6 million today to 2.1 million in 2030.

Failing to build enough homes could also see 13,400 more people made homeless and add 137,000 to social housing waiting lists as well as seeing house prices rise by £18,400.

Rents could also grow by £208 per year on top of existing forecasts that say the imbalance between supply and demand in the sector could see rents rise £1,900 per year.

However, housing minister Rachel Maclean said the government “doesn’t necessarily accept” Lichfields’ analysis.

She told the Levelling Up, Housing and Communities Committee in April: “Obviously we respect their research, they’re a well respected body, but we don’t necessarily agree with it, because they’re making assumptions.”

Labour has pledged to reform the planning system and restore local housebuilding targets if the party gains power at next year’s General Election. 

Nandy and shadow chancellor Rachel Reeves are also set to convene an emergency summit of mortgage brokers to discuss the impact of the housing crisis on first-time buyers and homeowners.

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Labour has previously called for mandatory measures to support mortgage-paying households, including allowing borrowers to switch to interest-only mortgage payments for a temporary period or lengthen their mortgage period.

“Across Britain, people are being hit hard by a Tory mortgage bombshell,” said Nandy.

“We would stop households missing out on the mortgage support they need by making measures mandatory, we will give greater rights and protections to renters, and we will take the tough choices to get Britain building.”

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