When the Government set its mission to deliver 1.5 million new homes this Parliament, the headline number captured the ambition. But for those of us who have spent the past year talking to the people charged with making it happen, the real story lies beneath that headline.
Over 12 months I’ve visited 10 councils around London and the Home Counties filming and interviewing officers, councillors and, more recently, residents. I asked them what is working in getting more homes built, and what needs to change to get more built. The result is the first Annual Review of 1.5M New Homes: The Local Government Challenge, co-authored with Anna Clarke (Director of Policy and Public Affairs, The Housing Forum) and launched at the Building the Future conference in London this month. It distils the voices of those at the coalface of delivery, revealing both the scale of the obstacles and the ingenuity with which councils are finding ways around them.
Their voices matter because very few homes get built in this country without a council being involved. Whether as the planning authority granting permission, a joint-venture partner with the private sector, or — especially for social and affordable homes — the direct developer and landlord, councils sit at the heart of every new housing scheme.
Ten barriers, one system
I asked councils to rank the challenges they face, according to the impact that overcoming those challenges would have on accelerating housing delivery. The 10 biggest: viability; funding; building-safety regulation; market stability and investor confidence; land availability and assembly; density and infrastructure; construction capacity; community engagement and trust; planning and local plans; and council capacity.
At first glance they look like separate problems. In practice, they are deeply interconnected. Rising build costs undermine viability; safety rules delay schemes and increase costs; high interest rates and a weak private-sales market remove the cross-subsidy that councils and housing associations rely on; skills shortages stretch both councils and contractors.
Trying to fix one issue in isolation, as one panellist at our launch put it, “just pushes the problem somewhere else in the system.” This complexity was echoed by Anna Clarke:
“When people say planning is the problem, they often mean three different things. It’s not one issue — it’s a combination of policy, capacity and cost. All of those feed back into viability.”
A funding and viability crunch
The Review found that the cost of building homes has risen by 30–40 per cent in five years, but land prices and grant levels have not adjusted. Eight out of 10 councils ranked viability as their top constraint. Councils in high-value areas, which ought to see strong cross-subsidy from private sales, reported stalled sites and growing gaps between what can be built and what’s needed.
Danny Sutcliffe, Partner at housing consultancy Red Loft, speaking at the launch, reminded us that this is not a recent crisis:
“We’ve under-funded affordable housing for 45 years. We’re one and a half million homes down on 1980. If there’s no cross-subsidy because the private market isn’t working, there’s no affordable-housing delivery.”
In short, councils are being asked to deliver more, faster, with less. Many are diverting funds into fire-safety and decarbonisation work, leaving little headroom to invest in new build. Access to borrowing is constrained, and bids for competitive grant funding absorb scarce officer time.
Regulation, markets and capacity
Nowhere is this tension clearer than in the wake of the new regime of building-safety rules. Councils overwhelmingly support the principles, but implementation has been slow and confusing. One officer described the new Gateway process as “an obstacle to delivery” that had left schemes on hold for 18 months or more.
Meanwhile, market instability is rattling confidence. Developers are struggling to sell homes off-plan; contractors are going bust mid-project. Housing associations — long the delivery arm of public housing policy — are retrenching to focus on existing stock. As Peter George, Strategic Director of Economy and Sustainability at the London Borough of Ealing, told the panel:
“In London the challenges are more acute now than they were 10 years ago. Viability, funding and investor confidence top the list — not planning.”
These pressures feed directly into the growing capacity problem inside local government. Planners, legal officers and development specialists are in short supply. Councils that went through financial crises have shed expertise they cannot easily replace.
Policy change and local leadership
Councils are not waiting passively for help. Many are adopting creative solutions: taking a proactive stance on stalled sites, negotiating flexible tenure mixes, and using joint ventures or land partnerships to unlock development. Sutton, for example, has moved a 34-home scheme from concept to planning in just two months.
Yet, as the report argues, national policy will have to shift too. Councils consistently called for:
- Long-term, flexible grant funding rather than short-term competitive pots.
- Support for building at higher densities where appropriate.
- Investment in skills and construction-sector capacity.
- Reward and recognition for councils that deliver.
A stable and predictable funding environment would allow councils to plan confidently and attract private-sector partners. As Ben Binns, Assistant Director (Development) at Cambridge City Council, explained:
“Access to the same kind of affordable-housing grant available in London would make a huge difference — it would unlock our confidence to regenerate.”
Culture, collaboration and risk
Beyond finance and regulation, the campaign found a more subtle but equally powerful challenge: culture. Many councils remain deeply risk-averse. As Sutcliffe put it, “People are scared to take risk because if something goes wrong, it’s a scandal. We need to learn to take small, managed risks and accept that not everything will work first time.”
That cultural shift applies to the wider sector too. Councils, housing associations and developers each control different pieces of the delivery puzzle. Bringing them together requires trust and shared purpose. Several councils told us that their most successful schemes came from partnerships where the political leadership, the development team and private investors all aligned behind a clear long-term vision.
Technology and the future
One surprise from the panel discussion was how little progress most councils have made in using digital technology to speed up delivery. Cambridge admitted it still manages its assets “on spreadsheets.” Ealing is experimenting with artificial intelligence to process planning applications faster, and several councils are exploring digital tools for public engagement. But there is clearly untapped potential for smarter data, predictive modelling and digital-twin technologies to reshape how councils plan and deliver housing.
A collective challenge
After a year of interviews, the message is clear: councils are willing, capable and determined, but the system around them is not. Fixing one policy lever at a time won’t deliver 1.5 million homes. It will take a whole-system effort — aligning national policy, local leadership, market confidence and community trust.
The 1.5M New Homes campaign will continue visiting councils in other parts of the country over the coming year to document how they are rising to that challenge. Each conversation adds a piece to the picture of how local government can once again become not just the regulator, but the builder and enabler of the homes our communities need.
“Not everything works in every local authority,” Sutcliffe reminded us, “but there are bits we can all take away and think, that could work for us. That’s what this report is about — sharing what’s working.”
The Annual Review can be downloaded from www.1-5m.co.uk.