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  • Mal McCallion

Build boost

In her fourth day in her new job, Chancellor Rachel Reeves has announced that there are going to be 1.5m new homes over the next five years.


Grabbing urgently at the lowest hanging fruit, she’s creating a task force that will supercharge ‘stalled projects’ such as Liverpool Central Docks and Northstowe in Cambridgeshire. The latter will be the UK’s biggest new settlement to be developed since Milton Keynes in the 60’s, with over 10,000 homes when it’s completed, over 1,200 of which have already been built. An excellent transport service speeds commuters and shoppers direct to Cambridge within about 15 mins and it’s already got three schools and a pub built from scratch, with shops nearby and a community centre arriving next year.


So why did it stall in the first place?


As ever, the property market has been an exemplar of pure economic theory - supply and demand being the key features. If you dump 10,000 properties in an (admittedly large) field then the price of each goes down. There are only so many people that will want to live in said field so, to encourage more, downward price movements have to happen.


But developers – and their investors – aren’t too keen on downward price movements. They can only sell parcels of land with bricks on once, so will always rather stagger delivery of these homes to maximise interest and price. That can mean ‘land-banking’ – saving land that they’ve already acquired until demand starts to build again.


As such, the developers of large projects such as Northstowe and the others called out by Reeves are always likely to face incentives to ‘stall’ progress. The tricky bit – and why a ‘task force’ might have to get very real about the second word in their descriptor – is arm-twisting those that have an economic incentive to wait, into cracking on and getting these projects completed.


Undoubtedly there will be taxpayers’ money involved. Labour has placed the likes of Barratt, Taylor Wimpey and Persimmon square in place as the gatekeepers to their ‘decade of renewal’ of the UK. With record profits over recent years, the kindly social care arm of these businesses has never been known to be their prime motivator. As such, subsidies to offset developers’ perceived losses from continuing to flood the market with homes will be the Government’s primary carrot, with maybe a regulatory stick of 'timed land-loss' to stop any backsliding along the way.


But that’s not the whole picture. Thousands of acres will also be needed to keep the average 300,000 new homes per year on track. Anyone who’s seen a local paper in the last twenty years knows that driving through developments at scale will rouse a thousand citizen armies, dedicated to stopping the march of the bulldozers on behalf of infrastructure poverty or migrating mice.


These things are known. They have been what has been holding back the UK’s ability to create enough property stock for its people for decades. What is unknown – so far – is how much appetite the new Government has to fight all-comers to get over them.


Labour has landed loudly and made the right noises about housing priorities. It is demonstrably true that people having security of tenure, and being able to build communities, are things that add to the quality of individual – and ultimately national – life.


But how hard are Reeves and Starmer willing to go to push these things through? The fact that they have started talking about housing so early and with such specificity suggests they think they know how to make projects like Northstowe real. Within a year, we should be able to see whether they’re right.


I’ll revisit Northstowe – which is just down the road from me – in July 2025 and let you know how it’s going on the ground. Between now and then, at the very least, the housing market should stay near the top of the political agenda. After 16 – or is it 17? – Housing Ministers since 2010, a consistent strategy and committed team from top-to-bottom might just finally find a way to make the difference.

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