As part of its plan to get Britain building again Labour announced a huge planning revolution shortly after its election win, expanding on a promise made in its manifesto.
It has pledged to build more than 1.5 million new houses over the next five years. This will largely be achieved by unlocking some of the building planning blocks that have previously hampered development. While this is good news for those looking to get on the property ladder as a landlord you might be asking what impact such a move will have on your business.
Labour’s proposals for planning revolution
Labour’s plans are extensive. In July, Rachel Reeves used her first speech as the chancellor of the exchequer to confirm that a new draft of the national planning policy framework would be published. She announced a number of preliminary changes. Mandatory housing targets are being reintroduced, switching the numbers to be built from local authority decisions to a number instead based on the standard method for calculating housing needs.
Changes to a focus on a brownfield-first approach and on grey belt land – that which has previously been developed or which is low-quality land with limited environmental credentials – will also free up more space for building while still preserving the green belt. The government has also published a vision for a new generation of new towns of at least 10,000 homes in size.
What does it mean for you as a landlord?
The government hasn’t yet specified the split between owner-occupied, social housing and the private rented sector. However, it aims to benefit all. Increasing the supply of housing will enable easier access for those wanting to get on the housing ladder since more properties will become available.
Ultimately it should also relieve pressure for renters who have faced rental price hikes in the last two years that have stretched budgets, while high house prices and high mortgage rates have put buying out of their reach.
One of the primary aims is to ensure more affordable homes with a focus on the building of new social rented homes. The fact that more social and affordable housing will be available, as well as more homes for those renting to buy, will ease some of the pressure on the private rented sector. Longer-term, that could mean that rental prices begin to fall.
However, such changes remain a long way off. In the meantime, many commentators have labelled the planning changes and housebuilding targets as over-ambitious. To relieve the pressures on the PRS the government will need to meet its building targets. Even then population growth could still outpace how quickly the 1.5 million new homes becomes a reality.
A consultation into the NPPF and other changes to planning policy is due to close on 24 September. After that date, things may become a little clearer. But, for the moment at least, it’s likely that Labour’s planning revolution will have little direct impact on landlords in the PRS.
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