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The Supported Housing Act needs to back good providers

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In February, the Government announced detailed proposals to take forward the Supported Housing (Regulatory Oversight) Act, including new national standards, a licensing regime, and changes to Housing Benefit.

The Act went through Parliament in 2023 in response to the emergence of rogue, poor-quality landlords in the sector, charging high rents but providing little meaningful support for residents.

The Act’s aim is to ensure consistent, high-quality standards across the country, whether the supported housing is for those who have experienced homelessness, older people, people with learning disabilities, or other groups in need.

While the introduction of national standards and a push towards higher quality is much-needed, the Act needs to get the balance right in driving out rogue providers, while ensuring good-quality providers do not face negative consequences.

There are several areas where we think the government needs to think again.

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An important drive towards national standards

The overall ambition of the Act – to ensure only providers who meet new standards are given a licence to operate – is the right one.

In its initial proposals, the government has set out principles to guide the supported housing sector, plus seven different standards that providers will be measured against. These include standards focused on person-centred support, empowering residents, protecting the environment, staff and safeguarding, and meeting local need.

As part of Emmaus UK’s response to a government consultation on these measures, we surveyed 161 residents and staff at our own supported housing charities and heard strong support for the standards, averaging at 93% agreement for the seven standards. In a series of workshops, residents told us the standards largely reflect what they believe is good-quality supported housing.

It was also clear, however, that some standards need to be strengthened, including the need to give residents a wider range of ways to shape their support, and to enable strong relationships to be built with multiple support staff.

We also recommend the government ensures alignment with other standards many providers already follow, for instance, via the Regulator of Social Housing. The standards should also include a greater focus on diversity, equity, and inclusion, ensuring supported housing meets the needs of specific groups, such as the LGBTQ+ community and women.

Backing good providers

Emmaus UK has concerns with the possible impact of new measures on good-quality providers, in many cases smaller organisations. Large amounts of money, time, and resources will be required for providers to apply for licenses, and evidence that they are meeting the new standards.

The result could be greater pressures being placed on the supported housing sector. We are already in a place where, last year, a third of supported housing providers had to close schemes because of funding pressures, and 60% say they will be forced to close schemes in the future.

There are several specific steps which we think the Government can take to reduce pressures. Firstly, providers need additional funding to go alongside the new burdens, funding we anticipate local authorities will receive. There should be detailed and ongoing guidance, support and training, including maximum transparency on requirements and having an adequate lead-in time to meet the standards. Local authorities should also provide training in their areas.

Secondly, the government should reconsider the definition of a ‘scheme’. Under current proposals, each separate postal address would require a separate licence. This could leave providers with lots of dispersed supported housing of only a few units each in an impossible position. They would need many different licences, driving up costs and disincentivising this type of supported housing at a time when more is desperately needed.

Thirdly, the government needs to ensure greater consistency in how the Act is rolled out across the country. We do not think it will be necessary for local authorities to apply discretionary conditions, which could create unpredictability for providers operating in different areas. We also believe that there should be a standardised licence fee rate rather than authorities choosing different amounts, or at the very least a cap.

Homeless Link have proposed a new national body to oversee licensing and ensure geographical consistency, something which we would support.

Creating a thriving supported housing sector

Making these practical improvements will help to get the balance right in bringing in strong new standards, while helping good providers to operate well.

We know the Act is not the only piece in the jigsaw to help the supported housing sector thrive. That is why we are backing the National Housing Federation’s ‘Save Our Supported Housing’ campaign, calling for the government’s housing-related support to increase to at least £1.6bn per year and for the homelessness and housing strategies to recognise the vital role of our sector.

Indeed, the withdrawal of funding for supported housing has contributed to the rise in the rogue, bad-quality providers seeking profit that the Supported Housing Act seeks to eliminate.

Getting the Supported Housing Act right is crucial for creating the high-quality supported housing sector that residents deserve. While there is strong support from residents and staff for new standards, we strongly urge the government to consider the impact on good-quality, often small, providers.

Let’s get this crucial piece of legislation right.

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Not so nimby after all?

Politicians, like people, often define themselves by what they are not – by what, and who, they are opposed to. They usually like to do so knowing they have public opinion on their side.

Before last year’s election, Sir Keir Starmer was happy to identify as a YIMBY (Yes In My Back Yard) – someone who is supportive of local housebuilding – rather than a NIMBY (Not In My Back Yard) and committed to backing the “builders over the blockers”.

But is the country on his side? Ipsos polling suggests that they are, with Britons’ instincts appearing to be more ‘build’, than ‘block’. In principle, 46% support building more homes in their local area, while 25% oppose it. But a substantial 24% are neither supportive nor opposed and other Ipsos research has shown attitudes to be conditional, based on what is proposed.

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However, if people lean more instinctively towards YIMBYism, they do not know it. While 26% expect that more people support building new homes than oppose it, 42% think that more oppose than support it and 20% think support and opposition are matched (12% say they do not know).

This suggests that NIMBYism is less prevalent than is often portrayed. NIMBYs are, themselves, particularly out of touch – while 28% of those who support building new homes wrongly believe that opponents outnumber supporters, 72% of opponents to new homes wrongly believe that they are in the majority.

This matters because, when asked what the primary factors are contributing to Britain’s housing shortage, the public continue to see opposition at the top of the list, alongside the financial position of local councils preventing them from building new homes, and a restrictive planning system. It is especially salient among opponents of new building.

This data has several political implications. First, it should embolden Labour, and local politicians, to be positive about housebuilding in both language and deed. Second, it gives YIMBYs a new target to take on – in addition to NIMBYism itself – the mistaken notion that opposition to housebuilding is the prevailing social norm (something which can be an important influence on public opinion).

These findings should give encouragement to YIMBYs and supporters of the Planning and Infrastructure Bill. Moreover, polling shows that the public tend towards supporting rather than opposing several of the Government’s planning policies, ranging from the mandatory installation of solar panels on new-build property to developing ‘grey belt’ land.

But there is also plenty of jeopardy ahead for Labour. Britons think that the means of how housebuilding is done matters as much, if not more, than the ends. Six in ten (61%) say that higher priority should be given to protecting and improving the environment even if it means fewer homes are built, three times the proportion (19%) who say that priority should be given to building homes quickly, even if it comes at the expense of environmental concerns.

An identical pattern exists in favour of prioritising the views of local councils and residents over the volume and speed of construction, a preference which is particularly strong among opponents of new building.

These sentiments explain the relative unpopularity of one component of the Bill – the extension of compulsory purchase – and the popularity of another – requiring developers to contribute to a Nature Restoration Fund.

In a similar vein, previous polling by Ipsos found that the public prioritises improving the quality and design of new homes over simply increasing the number of homes built (by contrast, MPs view both aspects as equally important). And public support for building varies according to the design aesthetics of new builds.

To put it mildly, the politics of housebuilding is littered with potential traps for politicians of all stripes. What makes public opinion endlessly fascinating, sometimes frustrating, is its nuance. People favour local decision-making but also central targets. They see the merits of new housing supply but bemoan the strain on existing infrastructure.

The data suggests that NIMBYism isn’t the dominating force it is sometimes made out to be, but neither can YIMBYs just turn up and win. While there is significant appetite for both building and planning reform, these are views, not values, liable to shift and change according to people’s lived and local experiences.

The public – and Labour’s own voters – will not look kindly on a system that shuts out local people who will live in, or nearby, over a million new homes.

Builders build houses. But so too do hearts and minds.

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Foundations for the Future: how can new delivery models help to mitigate the housing emergency?

Bosco verticale, Milan, Italy. Original public domain image from Wikimedia Commons

Nearly a year into the Government’s term, housing delivery and planning reform is clearly a top priority. The recently introduced Planning and Infrastructure Bill aims to support its ambitious target of delivering 1.5 million more homes over the course of this Parliament, while reforms to the National Planning Policy Framework (NPPF) were also pushed through by the end of 2024.

But we need to focus not just on delivery, but also on tenure. Research has identified a need for 145,000 new affordable homes per year up to 2031, including 90,000 for social rent. However  only 36% of identified need for affordable housing has been met over the last decade. With 1.3 million households in England currently on social housing waiting lists, there is a clear moral imperative to act.

Measures to boost affordable housing provision, such as through a recent injection of £2 billion of funding to the Affordable Homes Programme are welcome and long overdue. With the aim of building up to 18,000 new social and affordable homes, it’s clear that this alone comes nowhere close to meeting the scale of need we face. The upcoming Comprehensive Spending Review (CSR) is a perfect opportunity to provide some certainty via multi-year funding settlements for social housing provision. With a long-term housing strategy also due for imminent publication, it’s high time to see ambitious and innovative measures to tackle the housing emergency.

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RIBA’s report Foundations for the Future: a new delivery model for social housing aims to do just this. In it, we outline a new model based on a one-off initial investment from central government, which is used by local authorities to build homes for both social rent and market sale on land which is free at the point of use, such as local authority-owned land. This then eliminates, or at least significantly reduces, land cost – which can often stand in the way of building new homes.  

 The receipts from market sale homes are retained and then reinvested to build further homes for market sale and social rent. Not only does this promote mixed-use development, but reduces reliance on continuous central government funding to secure social housing provision – a real positive in the wider fiscal context. 

Our model is based on the following key assumptions:  

  1. The land being used for development is publicly owned and free at the point of use. As land cost is eliminated or substantially reduced, the cost of delivery is driven down. 
  2. Local authorities will deliver the housing stock, so the proposed model does not account for profit.  
  3. With land cost and profit being removed, the only costs remaining are the construction costs of building the new housing stock.  
  4. All revenue from the sale of homes on the open market is retained and reinvested for local authorities to use to build more social homes at a lower net cost.  

The market value of new homes is considerably higher than build costs in each region because land and profits are excluded. This means that in each region, for every market home sold, more than one home can be built. Our analysis shows that the ratio ranges from 1.4 new homes for every home sold in the North East, to 2.8 in the South West.  

This model is not intended as a silver bullet to provide an immediate fix, but instead as part of a wider suite of solutions. To illustrate its potential, a one-off investment of £1.24 billion – equivalent to local authority homelessness reduction spend in 2022/23 – from central government would build 20,350 homes, including 13,475 for social rent.

We know that the causes of the housing emergency are complex and broad, and the best solutions often context-dependent. What works well in London, for example, may not meet challenges in Tyneside. But what we hope the model does is demonstrate the potential of innovative approaches to housing delivery, and identify what is needed to enable us to build more social housing at scale.

 Local authority budgets are a key factor here. Planning departments experienced one of the most severe cuts in terms of real terms budget allocation from 2010 to 2020, with research showing that spending on planning is still down 40% from 2010/11.

These funding shortfalls have a real impact on local authorities’ ability to develop land, with most local authorities unable to access the resources or in-house expertise to directly deliver the construction and maintenance of major projects, including housing. Attention paid to this in the upcoming housing strategy and CSR could make a world of difference, allowing a boost to truly affordable housing while providing local authorities with an asset they can retain.

Margaret Mullane, Labour MP for Dagenham and Rainham, says:

I have consistently made the case for social housing since entering politics, and fully endorse RIBA’s contribution to the debate. An initial increase in capital investment allowing councils to build as part of the Spending Review will help increase revenue and cut Housing Benefit bills over time, paving the way for more truly affordable homes in areas like mine.

With clear political appetite to boost housing supply, and a strong economic and moral case behind it, investing in models like ours is a chance for the Government to make a bold statement of intent – one that the wider housing sector is standing ready to help them deliver on.

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Get on and build

Castle Reach in New Road develpopment for five bungalows and houses - site of the Old Drill Hall, image by Framlingham History Society.

Commentators from all corners have noted that successive Governments’ targets for housebuilding have not been reached in decades.  Labour has moved fast on planning reforms which lay the groundwork for a step change in land supply through changes to planning policy, introducing mandatory targets and opening up ‘grey-belt’ brownfield land for development.

The issue of slow building and under-delivery has been looked at by many in government and industry.  The 2018 Letwin Review into housing build-out found that lack of diversity in the housing market and over-reliance on a few large housebuilders was a fundamental driver of slow build-out of permissions.  The recent Competition and Markets Authority (CMA) housebuilding study  found that whilst planning is a major impediment to delivering, for open market sale homes the primary determinant of build-out rates is how many homes developers expect to sell without reducing prices.

The government recently published a working paper suggesting some measures to increase the pace of building.  But with just a handful of major housebuilders delivering around half of the homes in England, the key question is can they pick up the pace of building? 

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A slow-build business model

There is a public perception that developers ‘land-bank’, a practice of gaining a planning permission for a site in order to uplift the value of the land, without having any intentions of building on it. But this can be partly explained by volume builders generally needing around five or so years of permissions which create the “pipeline” for development.  Research from Lichfields has shown that it takes around than five years from first permission to the first homes being ready for occupation on sites with very large numbers of homes.  However, once they start building, even the largest sites rarely complete more than 150 dwellings per annum. 

The investor reports and trading statements of the largest publicly-traded housebuilders all report the key metrics including the number of new home sales per outlet per week, and the average selling price (ASP) for new open market homes.  The prime directive to optimise price is always present.   This can be seen in developer priority statements like “Continue to prioritise value over volume” in theTaylor Wimpy results for FY2023.  This makes sense to continue to achieve the consistently extraordinary levels of profit housebuilder shareholders expect.

Smaller regional and SME housebuilder have a much higher rate of build-out as a percentage of site size.  A scheme of 50 or so dwellings is commonly completed within one or two years, allowing the small builder to move on to delivering the next project. 

There are solutions

Many of the proposed reforms in the current consultation are quite modest and centred around monitoring and reporting.  These will help provide everyone better evidence on progress, but, with many councils struggling to allocate a planning officer to monitoring delivery, it’s not clear how this will have much impact.  The consultation raises the prospect of allowing councils to refuse permissions for specific applicants where they weren’t building out fast enough, though how further restricting permissions will help delivery is unclear.

The consultation also floats the idea of a ‘delayed homes penalty’, which would place a charge on developers in some circumstances where delivery falls behind a pre-agreed schedule.  The idea of charging council tax from the moment a permission is granted is a similar approach which has been discussed for a decade or more. On smaller sites this might be a manageable nudge, but on strategic sites of 1,000 or more homes it could render development unviable and might impact social landlords.

All the research and papers highlight that diversity in housing delivery does increase the rate at which new homes are completed.  Sites delivering higher percentage of affordable housing or build-to-rent, and smaller SME and self-build sites are not constrained by the number of market home buyers, so there is less motivation to build more slowly.  Another working paper from MHCLG, Reforming Site Thresholds, contains some proposals which may support this diversity by reducing planning burdens on smaller and medium-sized sites.

But can build-out be increased?

Where larger numbers of social homes are purchased on site, outside the open market, these come forward quite rapidly.  Improvements in construction, including building all or part of a dwelling off-site, can deliver significant time and cost efficiencies.  But if developers only build open market dwellings at the speed at which they will sell in a specific area, increasing build-out rates will be difficult.

There is no single magic bullet to get 1.5 million homes built in a timely fashion, but the Government has this issue in the spotlight.  Clearly the supply-side measures of funding for social housing and increasing opportunities for SME and smaller builders are fundamental.  Mandatory housing growth focusing the minds of local authorities on getting land allocated and permitted for future years to meet the land supply figure.  But we have a housing crisis now, and as the current consultation says “no-one can live in a planning permission”.

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Thirty years of challenging the public borrowing rules

At a time when the serious media are questioning the wisdom of Rachel Reeves’ fiscal rules, it’s easy to forget that this is a longstanding debate, and that housing has been a key part of it. Back in 1995, with the prospect of a new Labour government that might want to reverse the decline in public housing investment, there was similar interest in how fiscal rules could be changed to make it easier to do this without upsetting the markets. In June that year, a report called Challenging the Conventions aimed to show how it could be done.

Less than a decade earlier, housing association investment had been increased significantly by classifying it as outside the public sector, with only the grant they received counting on the government’s balance sheet. The ‘challenge’ in the new report – written by John Hawksworth of what is now PricewaterhouseCoopers with housing finance expert Steve Wilcox, and published by the Chartered Institute of Housing – was to argue that local authority housing investment should have the same advantage. Essentially, the report said that international accounting rules allowed borrowing by ‘public corporations’ to be kept out of the main measure of government debt, and that the UK was out of line with other countries and should make this change. It argued that council housing operations are ‘public corporations’ because they are financed from their own earnings (rents) and should be able to borrow prudentially without being subject to the restrictions imposed by the Treasury’s ‘PSBR’ (Public Sector Borrowing Requirement) measure, which only the UK used.  At the time it was estimated that the change could allow extra borrowing for investment of over £1 billion, then a transformative figure.

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Lobbying around the report, including meetings with the Labour Shadow Treasury Team, revealed that the only real concern was the attitude that would be taken in the City and financial markets. It also won the support of the Observer’s economist Will Hutton. Extensive consultations with city bodies led to a follow-up report, Consensus for Change, in March 1996, which showed little opposition to the measures proposed. However, when Labour was elected in 1997 its immediate concern – just like Rachel Reeves’ – was to reassure the markets, and to not rock the boat any further given the dramatic decision to make the Bank of England independent.

It must be said that the Labour government did not see building council housing as the solution to the housing crisis and relied entirely on housing associations to do that. Some smaller changes, like the decision to ‘release’ capital receipts from right to buy sales, did proceed. Even so it was extraordinary how Challenging the Conventions started a wide debate in the housing and finance worlds – also taken up by the tenants’ movement – to ‘change the rules’ to enablecouncil housing investment. It was slow, but this would eventually bear fruit.

Yet another CIH report, Council Housing: Financing the Future, showed the huge disrepair backlog that had built up in the council housing sector. Rather than changing the rules, the Labour government had followed a policy of only releasing investment if councils agreed to transfer their stock to a housing association. This provoked a huge campaign for the option of retaining stock under council control. Housing minister Nick Raynsford realised that a new mechanism was needed to bring in the required investment and meet tenants’ and councils’ demands to keep their stock.

The answer, in Labour’s housing green paper of April 2000, was arm’s length management companies. ALMOs would enable councils to retain ownership but receive extra subsidy in return for handing management over to more business-like bodies and achieving a predetermined standard in an inspection. They were run by boards made up of council nominees, tenants and independent experts. This would enable the social sector to largely meet the new Decent Homes Standard within the target period of ten years, a success about which Labour was remarkably reticent. During the Labour government the Office for National Statistics (ONS) did, quietly, begin to classify council housing as a set of ‘public corporations’ in the national accounts, although as it stayed in the ‘PSBR’ this made little difference.

The real impact of the Challenging report came later – when John Healey was housing minister. He was keen to put councils’ housing revenue accounts (HRAs) on an independent and localised footing that would reduce Treasury controls. By then, council housing was in surplus. Negotiations led to a complex ‘settlement’ which gave councils operational independence to manage their homes in exchange for taking a share of the debt previously accrued by council housing nationally. The deal was lost when Labour left office in 2010, but it suited the ‘localist’ agenda of the incoming Conservative government who delivered the changes in 2012 (albeit on less favourable terms).

Councils have never, however, escaped the grasp of the Treasury and the disruption caused by central government decisions. Huge cuts to social housing grant under the Tories led councils to look to their HRA surpluses to support new building. Seemingly random decisions – like George Osborne imposing rent reductions for five years to save housing benefit costs – undermined a system which was modelled on gradual rent increases. Occasional high points – like 2018 when prime minister Theresa May ended the ‘caps’ on councils’ borrowing that the Treasury had insisted on in 2012 – have masked a slow slide back into unsustainability.

CIH and Savills showed last year that, as a result, councils can sustain £12 billion less debt than was expected in the 2012 settlement. Nevertheless, as LHG’s 2021 report The Missing Solution: Council Homebuilding for the 21st Century showed, councils are more determined than ever to build new homes but are faced with an increasingly desperate need to invest in their current stock and to improve the quality of management.

Although the seemingly arcane debate about ‘the rules’ has lasted 30 years, and there was never a clear moment when the proposals in Challenging the Conventions were implemented, it has had a profound impact on the council housing sector, enabling it to survive when its death was widely predicted. At one time it was hard to find anyone on either government or opposition benches willing to speak up for council housing, now it is widely perceived as key to solving the UK’s housing crisis. It is an extraordinarily successful model that is capable of delivering high quality homes at genuinely affordable rents. Now, as in 1995 when Challenging the Conventions was launched, it just needs a decent financial framework and real commercial freedoms to enable it to flourish.

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Building  1.5m homes with a skills shortage: strategies to alleviate labour demand

Image licensed under pixabay
Image licensed under pixabay

The Skills Shortage

As outlined in ‘A Plan to Boost Skills in the Construction Industry’, an additional 251,500 workers will be needed to meet UK construction output targets by 2028. However, the Construction Industry Training Board (CITB) reports that more workers are leaving the industry than joining it, according to the ‘Skills Construction Needs Labour Market Intelligence Report 2024-2028’.

Even with proposed training reforms, it will take several years for apprentices to become qualified and gain the necessary experience. To reduce reliance on the Immigration Skills List for labour, the government must adopt strategies that lessen the demand for skilled workers within its nationwide mass homebuilding programme.

Reducing Labour Demand with Modern Methods of Construction

Benefits of Modern Methods of Construction (MMC)

Modern methods of construction (MMC) prioritise off-site techniques, such as mass production and factory assembly, offering an alternative to traditional on-site building. This approach is especially effective for large-scale residential projects, reducing the need for skilled on-site labour.

Key MMC technologies include:

  • Modular construction: Factory-made units or components (e.g., kitchens, bathrooms).
  • Flat panel construction: Precast reinforced concrete panels produced off-site.
  • Timber frame construction: Timber components assembled or partially constructed off-site.
  • Double wall construction: Factory-made panels used to contain on-site concrete pours.
  • Sub-assembly components: Specific components, such as dormer windows, made off-site.

MMC methods require fewer highly skilled trades than traditional methods, making them effective at reducing labour demand. While specific figures may vary, MMC can cut on-site labour by up to 70%, reduce construction costs by 20-40%, and shorten build times by 20-60%, according to ‘The Benefits of Modern Methods of Construction in Housing – Performance Data and Case Studies by Construction Excellence Report’.

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Strategy for Advancing the MMC Sector

  • Enhance UK capacity: Strengthen existing MMC providers or create new ones to serve local authorities, social housing providers, and development corporations. Establish alternative procurement strategies before starting projects.
  • Collaboration for design development: Partner with MMC providers to create prototypes for asset types such as low-rise apartments and schools. Ensure designs are cost-effective, transportable, and widely available. Manufacturing facilities should be in urban centres for easy access to labour and transportation but spread across the country to reduce inefficiencies.
  • Promote local production: Support local production using domestic materials. This “local content” approach stimulates the economy by creating jobs and supporting the broader manufacturing chain.
  • Ensure steady demand: The stop-start nature of past homebuilding projects has hindered the MMC sector. The government could address this by mandating MMC in a nationwide mass homebuilding programme, ensuring consistent production.
  • Government incentives: Provide financial support or incentives for collaborations between industry bodies, academia, and private developers to prototype and refine MMC designs, ensuring only high-quality products are mass-produced.

Despite government efforts several Category 1 MMC companies collapsed in 2022 and 2023 and significant barriers remain in the sector, including risk aversion from warranty providers, insurance companies, and unclear building regulations.

In 2021, Homes England launched a multi-year research project to assess MMC’s impact on the housing sector. The government should publish an interim report to share lessons learned and propose actionable strategies.

Key Initiatives could include:

  • Capacity review: Strengthen MMC providers to support local authorities and housing providers. Develop alternative procurement strategies before projects begin.
  • Prototype collaboration: Work with providers to develop cost-effective, transportable prototypes for assets like apartments and schools. Encourage partnerships to ensure high-quality designs.
  • Local production: Support domestic manufacturing to stimulate the economy and create jobs.
  • Steady demand: Mandate MMC in government-backed mass housing projects to ensure consistent demand and supply.

Additional Strategies to Reducing Labour Demand

Other Strategies should also be explored that could reduce Labour demand such as:

Self Build or Custom Build Homes

Self-building allows individuals to construct their own homes, often with the help of small contractors and minimal skilled labour, especially when using kit or modular homes. This off-site prefabrication, a form of MMC, offers the same labour-saving advantages.

The government can support self-builders by requiring all local authorities and development corporations to offer serviced building plots for sale. Additionally, reviewing UK manufacturers and implementing initiatives could boost supply, design variety, local content, and lower costs, helping increase the current estimated 7-10% of self-built homes annually.

Utilising the Private Consultancy Sector

Engaging the UK’s leading international construction consultancies to take on a larger role can leverage their global staff to support UK projects, either through back-office operations abroad or by assigning staff to the UK.

This would enable government bodies, such as development corporations, to operate more efficiently by focusing on core competencies while outsourcing other functions to consultancies. Additionally, private consultancies bring national and international expertise, innovation, and best practices, contributing to a more dynamic involvement in projects.

Simplifying Planning

Planning reform began with the release of the revised NPPF in 2024, but supplementary policies and guidance are needed to simplify the planning system for all users.

For instance, implementing zoning and design guides could provide greater certainty for proposed developments, reducing the assessment workload on planning departments if developments comply with these standards.

Another example would be granting planning powers for new town developments to the development corporations managing them. These corporations could establish simplified planning rules, particularly if developments within the master plan require minimal local consultation or integration with the existing built environment. This would allow smaller planning teams to handle a larger volume of submissions.

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Housing issues loomed large in Australia’s Labor’s historic election win

Prime Minister Keir Starmer attends CHOGM Summit in Samoa -Day 2 by Number 10 is licensed under CC BY 2.0
Prime Minister Keir Starmer attends CHOGM Summit in Samoa -Day 2 by Number 10 is licensed under CC BY 2.0

Perhaps providing some much-needed cheer for the British Left, Australia’s Labor Party romped home in the nation’s recent federal election.

Seeking a second three-year term, Anthony Albanese unexpectedly routed the conservative Coalition, dominant for most of the post-war period. Having been odds-on to lose only six months previously, ‘Albo’ scored the biggest winning party victory – in seats – in modern history.

And, while it probably didn’t decide the election, housing policy was a fiercely debated central issue during the campaign, with Labor’s pitch (and record) generally landing better with the public.

Such was the importance attached to the topic as a hot button issue, that both major parties chose to reveal major housing initiatives as centrepiece announcements at their official campaign launch events.

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Labor’s housing pitch – building on recent initiatives

Before going into these new proposals let’s rewind for a bit of context.

The recent election came at the end of a three-year Parliamentary term after Labor’s win in 2022, ending nine years of Coalition rule.

During that period federal housing policy was largely limited to home ownership initiatives. Previous social and affordable housing programs were terminated, with the federal government arguing that, under a narrow interpretation of Australia’s constitution, housing for lower income groups is the responsibility of the states, rather than the federal government.

Having regained power in 2022, Labor dramatically ramped up federal housing policy action – initiating a social and affordable housing investment program, the ‘Housing Australia Future Fund’; as well as creating a national shared equity home ownership scheme for first home buyers and reforming foreign investor tax settings to encourage build to rent construction.

It also initiated a broader housing affordability push – the ‘National Housing Accord’ – based on the stated belief that this is largely a housing supply problem. Therefore, at least at the level of political rhetoric, the solution is to be found largely through corralling the states into streamlining their planning systems.

Much of the media also buys this argument. It is also, of course, popular with the housebuilding industry as well as with market liberal economists.

Somewhat echoed by UK Labour, the centrepiece of the Accord is the aim, jointly pledged by federal and state governments, to enable construction of 1.2 million homes over five years. Largely thanks to difficult market conditions, however, current industry output is lagging way below what would be needed to achieve that.

Labor’s election 2025 offer

Now back to the election. Federal Labor launched two new policies ahead of polling day, both targeted on first home buyers. The first substantially expanded an existing mortgage guarantee scheme enabling FHBs to secure a housing loan with only a 5% deposit.

No doubt, this will have been electorally resonant, although it was fairly heavily criticised in the media as inflationary. But since it doesn’t involve a ‘tax expenditure’ as such (unlike, say, stamp duty exemption) this might have been a bit excessive.

Albo’s second new housing pledge was a much bigger deal, and more consistent with the overarching ‘supply focus’ mentioned earlier. If re-elected, Labor pledged $10 billion in federal funding to work with the states in directly commissioning 100,000 new homes ring-fenced for first home buyers over 8 years.

By implication, these homes will be sold at ‘cost price’ – likely lower than market price thanks to having no need to factor in developer/builder profits. Over the long term, therefore, the program could be close to cost-neutral from a public accounting perspective. This is reflected in the committed funding, $8 billion of which is for concessional loans rather than grant.

This is big. Although they continued to build public rental housing at some scale until the 1990s, Australian governments have barely operated build to sell programs since the 1960s. Doing so notably challenges neo-liberal presumptions about the proper extent of direct state involvement in supplying a commodity that is (especially in Australia) largely provided through the market.

As a potentially counter-cyclical initiative that expands overall housing production (assuming no crowding out), it could help in slightly moderating prices, market-wide, as well as benefiting the homebuyers directly involved.

The Coalition’s election pitch

Meanwhile, in its election offer, the Coalition pitched its own radical homeownership policy bid: the introduction of mortgage tax relief for first home buyers.

Labor’s initial fear that this could prove to be a game changer in marginal seats soon receded when the policy came under heavy fire from just about every economist in Australia. This criticism mainly highlighted the scheme’s likely inflationary impacts; the prime reason that UK housing experts breathed a sigh of relief when Britain’s MIRAS was finally culled in 2000.

A second Coalition home ownership pledge was to enable first home buyers to dip into their otherwise locked retirement savings accounts to fund mortgage deposits. This was justified on the highly resonant argument that individuals should have freedom to access ‘their own money’.

But again, the initiative was heavily criticised as inflationary – as well as risking a net loss for participants if devalued retirement savings were to outweigh the benefit of accelerated access to home ownership.

In support of its own claim to support increased overall housing supply, the Coalition also promised $5 billion in loans and grants to fund housing-enabling infrastructure. But the emphasis on greenfield sites conflicts with the conventional wisdom that Australia already has too much urban sprawl, so infill development should be encouraged.

What was missing?

Both of the major parties failed to include any new social or affordable housing programs in their 2025 election platforms.

Neither Labor nor Coalition announced any significant new initiative to relieve rental stress at the lower end of the housing market that affects millions of Australians. Measures that might, at least indirectly, help stem the rising tide of homelessness that now sees more than 10,000 newly homeless persons being taken on by support providers every month.

But Labor has a much better excuse for this omission because the Albanese Government’s 2022-25 initiatives were only just getting going at the end of the previous Parliament. While these can be justifiably criticised as very modest in scale by comparison with the level of need, the Coalition made it clear they would be simply scrapped if it won the election. A return to the approach of 2013-22 when the federal government essentially left this field.

Many have also criticised the recent major party offers as ignoring the hugely overdue need for fundamental housing tax reform.

On the Labor side that is the blunt reality. But the Coalition’s big pitch, parachuted into its campaign launch, in fact amounts to a striking proposal for a major property tax re-set.

Unfortunately, though, this would have piled yet another damaging ‘market distortion’ on top of all Australia’s existing property tax breaks. Concessions that have, over decades, contributed to today’s housing affordability problem, as their value is capitalised into higher prices.

What is the UK relevance of any of this?

Perhaps the most UK-relevant ‘housing policy’ aspect of the story relates to the new ‘Build to sell’ scheme which, with the election now decided, we can expect to see beginning to take shape in coming months.

I think this may resemble aspects of the state role in the UK’s post-war New Towns program. Maybe it’s envisaged that such an approach would form an element within the renewed New Towns initiative planned by the Starmer Government.

It may be that Angela Rayner’s department would benefit from finding out more about the way that the Australian Government plans to roll out its own version during the new Parliamentary term.

Where I am, we hope that MHCLG’s promised national housing strategy for England provides some strategic planning inspiration for Australia.

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Labour’s opportunity to disrupt housing taxation

HM Treasury Entrance sign by HM Treasury is licensed under CC BY-NC-ND 2.0

Economic management is quickly becoming the defining factor of this Government. Penned in by tax pledges, and with less room to borrow than previous administrations, the choices which it is making to free up funding for cash-starved public services is having severe political effects.

Increases in employers’ national insurance contributions (NICs), a freeze in Personal Independence Payments (PIP), and limiting the eligibility of the Winter Fuel Allowance have all been deeply unpopular and cut through with voters.

 Creative solutions to find money are required, and looking at the antiquated way in which housing is taxed could not only free up more money for public services, but result in direct cash benefit for lower income households.  

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How do we currently tax housing?

Broadly in the UK housing is taxed in three ways.

First, all voters pay a portion of the value of their house in council tax (total value: £32.7bn/year). The calculations around council tax are somewhat byzantine. Rather than being directly proportional to property values, homes are put into ‘bands’ based on the value of the home in 1991 and have taxes levied on them on this basis. A home worth £320,000 in my home borough of Haringey, for instance, pays 1.4% of its value every year in council tax, while one valued at £68,001 pays 3.2%.

These taxes have also exacerbated existing regional inequalities, with households in the North East paying 18% more than households in London after years of successive increases, despite the fact that house prices have increased in London and the South East significantly more than they have in the North in this time.

Home buyers also pay a portion of the value of their new home in Stamp Duty (total value: £11.6bn/year). Stamp Duty is widely criticised as a tax on housing mobility, rather than a tax on housing wealth, which disincentivises moves such as downsizing, which could have a positive effect on the overall housing market.

Finally, Inheritance Tax (IHT, total value £6bn/year) is increasingly a tax on housing as the value of homes has increased and the threshold for paying IHT has been frozen since 2010. The number of estates liable for IHT has increased from 15,000 in 2009/10 to 27,800 in 2021/2, the percentage of estates paying IHT is estimated by the Institute for Fiscal Studies to increase from 4% currently to 7% in 2032.

Both council tax and inheritance tax are rated by voters as among the most unpopular according to polling by YouGov, with 45% of voters perceiving them as unfair.

How could these be reformed?

All three of these taxations are ripe for reform, and tackling unpopular levies is a clear way for Labour to show itself as embracing its change mantra and challenging existing unfair structures.

But doing so will inevitably create losers as well as winners, and so any changes must be carefully thought through.

Commonly-suggested ideas for council tax reform, for instance, have included updating the valuations from their 1991 basis, and making them directly proportional to property value, rather than putting homes in crude bands. Reforming council tax would disproportionately benefit the poorest households, but some poorer households, particularly living in London’s warped housing market, would also be liable for higher bills.

Meanwhile, reforming Stamp Duty would likely lead to lower receipts in the short-term but have a more positive impact in the long run. Ideas for this have included introducing an option to defer payments over a longer period as part of a gradual move to levy a much smaller rate annually, rather than to levy higher charges at the point of sale.

Doing so would both benefit younger people more likely to be making their first purchase, as well as older people looking to downsize, but making the final move to an annual levy on all homes would have substantial political risk.

Tackling IHT may be considerably simpler. Of the 27,800 estates which paid IHT in 2021/2, the 3,153 estates worth over £2 million paid over half of the £6 billion collected in that year. Introducing graded bands for estates under this level, while levying higher taxes on this upper level would give a default tax cut to tens of thousands of people a year during one of the most emotionally difficult times of their life, while shifting the burden to a group most would see as super-rich.

However, the Government’s recent moves with tapering IHT zero-rating for farms and businesses has shown that any tinkering with so-called ‘death taxes’, even when levied on households with higher levels of assets, can be politically dangerous. So even this taxing double-millionaires at a higher rate may well have political risks.

None of these options are necessarily easy, but in a time of increased fiscal strain and in the aftermath of a number of politically difficult tax rises, creative thinking around taxation is more important than ever. And, as the housing market continues to represent a substantial source of wealth, how this is taxed in a sustainable fashion needs to be in our national discussion.   

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Bricks, Mortar, and the People to Lay Them

Since entering office last summer, the Labour Government has put housing policy front and centre, pledging to deliver 1.5 million new homes this term. While ministers acknowledge that figure may be ambitious, there’s no doubt they’re making progress in the right direction.

But a big sticking point isn’t just land or planning; it’s people. Who’s going to build these homes? And not only that, who’s going to maintain and retrofit the ones we already have? We don’t want to fill one side of the housing bookshelf with shiny new homes while watching the other side, our existing stock, crumble through neglect and a lack of people to maintain them. We need a skilled, future-ready workforce to support both ends of the spectrum. This is where organisations like PfP Thrive can support the sector and government on its shared vision for change.

Untapped potential

While economic inactivity has fallen slightly over the past year, over 9 million people in the UK remain out of the labour market. That’s a substantial, untapped pool of talent. With targeted support and the right partnerships, like the programmes we deliver at PfP Thrive, many of these individuals can be supported into meaningful, sustained employment.

But simply offering opportunities is not enough. We must understand what’s preventing people from accessing them. Our own research – conducted across 3000 customers in 2024 – shows that bespoke, barrier-conscious training programmes are essential. For example, within our own customer base, 44% live with three or more conditions that affect their daily lives, while 76% report at least one. These individuals are ready and willing to work – and with the right support, they can thrive.

And it’s not just about training the bricklayers, electricians, and engineers of the future – it’s also about backing today’s workforce. That means investing in upskilling, embracing modern methods of construction, and supporting the shift to new materials and techniques. We’re here to help drive that change – and deliver the homes Britain urgently needs.

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Challenges ahead

The government’s £600 million investment in skills is welcome and offers an opportunity for organisations like ours to play a greater role in delivering high-quality training. We’re encouraged by the focus on bootcamps and foundation apprenticeships and are already working with partners to unlock better use of the Apprenticeship Levy.

Yet challenges remain. The recent rise in National Insurance contributions could dissuade employers, particularly SMEs, from investing in apprenticeships and training. For businesses already grappling with rising costs, this could be the tipping point. If we are truly serious about closing the construction skills gap, government policy must reflect the realities faced by employers – and make investment in people not just possible, but irresistible.

Championing Diversity in Housing

There are however other underlying issues that continue to exacerbate the sector’s skills shortage. Construction continues to face cultural challenges; be that poor gender representation – with 90% of construction apprenticeships still taken up by men – or discrimination against LGBTQ+ workers or people of colour. Age is another issue-  one in five workers in construction is over 55 – as is the resistance to helping those who have additional needs or barriers to work.

A strong workforce is a diverse one, and this means creating inclusive environments, supporting flexible working, and actively removing barriers to entry.

Collaboration and Debate

These points were echoed during a recent webinar we hosted with the University of Cambridge, featuring sector leaders eager to discuss solutions to the skills crisis. Mushtaq Khan, Chief Executive of the Housing Diversity Network, was clear saying that: “Diversity matters. But under-representation in the sector can be off-putting for those looking to move into construction. There’s a lack of networks, confidence, and a whole cohort of people we could empower with the right support systems.” Debansu Das of Zed Pods added that areas like offsite construction are already making headway – providing safer, more controlled and inclusive working environments that naturally attract a more diverse workforce, including more women.

A Pivotal Moment

Delivering more homes and supporting people into meaningful employment underpins the government’s growth priorities and our future success as a country. This is a defining moment for the sector. If government, industry, employers, educators and organisations like PfP Thrive can come together, we have a real opportunity. Not only to meet the 1.5 million homes promised, but to ensure we have a skilled, inclusive workforce ready to shape the homes and communities of the future.

Tom Arey is director at PfP Thrive, an organisation delivering comprehensive bespoke training programmes for the UK housing and construction sectors, as well as compliance training, trade skills apprenticeships and leadership development to meet evolving workforce needs.  

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Reforming Section 106 is crucial for a generational boost in social housing

Blochairn Road Social Housing, Glasgow by TECU Consulting is licensed under CC BY-NC-ND 2.0
Blochairn Road Social Housing, Glasgow by TECU Consulting is licensed under CC BY-NC-ND 2.0

The Section 106 (S106) planning obligation system has long been the backbone of affordable housing delivery across England. Yet, far from being the robust solution we need, it has morphed into an inadequate sticking plaster, barely concealing a profound crisis in genuinely affordable, social rented housing. The more reliant we have become on S106 agreements, the fewer homes we’ve actually delivered. It’s high time we confronted the reality: our dependence on developer-led contributions is fundamentally failing to deliver the homes communities desperately need.

First conceived in the 1990 Town and Country Planning Act, S106 was originally intended to mitigate the localised impacts of new developments—addressing pressures on local infrastructure like schools, healthcare, and transport. Generally, there are two ways to fund social and affordable housebuilding: through government spending via grants or loans, or through developers’ contributions. However, over time, as state-backed social housing provision shrank dramatically, S106 evolved far beyond its initial scope, becoming a primary vehicle for affordable housing supply. Today, it accounts for a staggering 38% of social homes and half of all affordable homes delivered annually. But instead of a sign of success, this reliance reveals a deeply flawed approach.

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The current mechanism incentivises developers to prioritise ambiguous and often less suitable housing tenures such as shared ownership or ‘affordable rent’—both considerably less beneficial than genuinely affordable social rented homes. Worse yet, developers frequently opt out of construction obligations altogether, preferring financial payments to already overburdened local authorities with little capacity to use this funding to build. Indeed, while the government’s recent pledge to recruit an extra 300 local planning officers is a positive step, it falls significantly short, replacing fewer than one in ten of the planning positions cut throughout the 2010s. This leaves local authorities severely under-resourced to effectively manage and enforce S106 obligations.The result is clear: fewer actual homes and a deepening crisis.

The viability assessment process, designed to test whether developers can meet planning obligations without compromising profits, has further exacerbated the problem. Despite high-profile cases—like the infamous Battersea Power Station development—raising awareness of exploitation, the truth is that these viability assessments routinely undermine local authorities. Too often, developers reduce or even eliminate their affordable housing commitments entirely by claiming financial unfeasibility. This opaque and subjective process means fewer social homes are built, and crucial opportunities for alleviating housing pressures are lost, often permanently.

Ironically, the reliance on S106 has only deepened since government funding for social housebuilding was drastically cut post-2010. With austerity measures stripping away substantial grant-funding streams, we increasingly looked to developers’ contributions as a makeshift replacement. But the numbers don’t lie. While government targets aim for 300,000 new homes annually, just 7,500 social homes were built in England in 2022/23, down alarmingly from nearly 40,000 a decade ago. Even more starkly, Right to Buy alone axed more than 14,000 social homes out of circulation in the same period, meaning we have had a net loss in social housing stock. Clearly, our existing approach is broken, underlined by the fact that the more we’ve depended on developer contributions, the fewer genuinely affordable homes we’ve managed to produce.

But diagnosing the problem is just the first step. We must urgently pursue substantial reforms to the S106 framework, starting by prioritising the construction of genuinely affordable social rented homes within all agreements. Introducing a mandatory minimum percentage of 15% for social rent tenures within S106 obligations would directly counter developers’ preference for less socially beneficial tenures or financial opt-outs. This simple measure would clarify obligations, remove ambiguity, and most importantly, deliver the genuinely affordable homes that communities across the country desperately need.

Additionally, we must reform the viability assessment process fundamentally. Transparency must become mandatory, and local authorities need enhanced powers and resources to scrutinise developers’ claims effectively. A revised, robust viability framework would prevent abuse, accelerate negotiations, and ensure that developments truly contribute to local housing needs rather than merely inflating developers’ bottom lines.

These immediate reforms are essential but insufficient on their own. Ultimately, the underlying crisis in social housing demands a significant increase in direct government investment. We must look to the next phase of the Affordable Homes Programme, as well as the new £2bn boost, as an opportunity to refocus explicitly on social rented housing. A clear national target backed by meaningful public investment could not only reduce reliance on developers but would restore the stability and predictability required to deliver social housing at scale.

The stakes could hardly be higher. Without these reforms, the government’s ambitious housing targets will remain forever out of reach, and our housing crisis will only deepen. The reliance on a failing S106 system is simply unsustainable. It’s time we embraced a more ambitious, government-backed strategy for social housing delivery—a strategy that prioritises homes over profits, transparency over obfuscation, and genuine affordability over sticking plasters. Only then can we build the future our communities truly deserve.