Housebuilding was a key element of the Labour party election campaign. Angela Rayner announcing plans to build 1.5 million homes over the next five years. Since the election Labour have announced a new methodology to calculate housing need and set new housing targets for local authorities across England. These will exceed original housing targets set by the Conservatives in 2017 of 300,000 homes per annum (scrapped in 2022), delivering 370,000 homes per annum across England, but how do the new targets differ?
Target by numbers: increase from old target to new
Applying the new measure of housing need means most local authorities across England (59%) could see their housing target more than double. The housing target for 32% of local authorities has increased by up to 50% from the old target, while an additional 27% of local authorities have seen an increase in their target by 51-100%.
17.6% of local authorities across England have seen their housing targets decrease under the new methodology, most of which are in Greater London. It’s worth noting here that the removal of the Urban Uplift Policy, originally created to direct housing growth to the twenty largest urban areas, has meant other large cities and towns, like Manchester, have also seen a reduction. The removal of the policy now means that housing targets are more evenly distributed across England, with some smaller towns and rural areas now targeted with significant increases in housebuilding.
More rural areas such as Tamworth in Staffordshire and Pendle in Lancashire have seen an increase in their targets of 261% and 209% respectively, some of the largest percentage increases across England. This equates to 321 and 258 additional new homes now required.
In terms of actual numbers, Birmingham has the largest housing target of 4,974 new homes. But due to the new methodology and the removal of the urban uplift this new target is 31% lower than the old target of 7,174 new homes. Redcar and Cleveland has experienced the largest increase under the new methodology (+1,338%) an increase from just 45 new homes, to 642.
Targets by numbers: New target vs net additions
But even with the new approach London still accounts for 22% of housing targets across England, the highest of all regions. In numerical terms, the largest housing targets outside of London are seen across the South East and East of England regions. A housing target of 40,837 across the South East will account for 17% of the total target across England. So how do these targets compare against previous housing delivery?
The map above compares London boroughs new housing targets against historical average annual net additions (2020/2021 – 2022/2023). There are six boroughs across London where new housing targets exceed average annual net additions by more than five times. These include Bromley, Camden, Kensington and Chelsea, Lewisham, Redbridge, and Richmond.
Comparing targets with historical net additions shows areas across the Midlands have historically been closer to reaching housing targets. On average since 2020/2021, the East Midlands region has hit 83% of its housing target, followed by the North West (75%) and the West Midlands (71%).
A handful of areas across England have a significant amount of work to do over the next five years if they are to meet housing targets. Portsmouth in the South East will need to increase housing delivery by 8.3 times the current rate if it is to meet its target of 1,098 homes per annum. On average since 2021/2022 it delivered just 12% of the proposed target.
Just 32 local authorities have met housing targets each year since 2020/2021. Half of these areas now have a smaller housing target, or a small increase of 0-50%, compared to historic targets.
Targets by numbers: Total value of new homes
If we built all the 370,000 homes target the total value of new homes built could be as much as £148bn across England. London alone could see the total value of homes completed top £55bn. Outside London, the South East of England will see the largest total value from new homes if targets are met (£30bn).
The total value of new homes across the top 20 local authorities (in terms of housing target) will exceed £20bn (excluding London). The top 20 have been defined as the local authorities with the largest housing targets. A significant proportion of these are located across the Midlands or the North of England, including Birmingham, Manchester, most areas in Yorkshire and County Durham.
Average house prices are typically higher in southern areas of England, therefore we can expect higher total value from new homes development in these areas. Despite having the sixth highest housing target across England, average house prices in Buckinghamshire of £558,740 in 2024 mean the area is set to record £2.3bn total value in new homes if the housing target of 4,122 is met. This is the highest total value across England.
Cornwall unitary authority has the second largest housing target of 4,454 new homes. The undersupply and affordability of homes across Cornwall has been cited as critical for many years now. Homes in the area, particularly along the coast, have been bought up by those seeking a holiday home or holiday let. This, coupled with planning and development constraints within Cornwall National Landscape areas, means little stock available for permanent residents, particularly affordable homes.
The housing target across Cornwall has increased by 65%, from 2,707 to 4,454. By comparison, annual net additions in Cornwall have averaged 2,681. This means they will need to increase by 1.6 times the current build rate to meet new targets. With an average house price of £344,370 (year to date 2024), this would assume a total value of £1.53bn in new stock.
Table 1: Total value of new homes (proposed to be built), by region
| Region | Number of homes – new methodology | Total value of new homes (£bn) |
|---|---|---|
| London | 80,693 | £55.7 |
| South East England | 69,060 | £30.3 |
| East of England | 44,858 | £14.5bn |
| South West England | 40,343 | £14.2bn |
| North West England | 37,817 | £9.1bn |
| West Midlands | 31,754 | £8.7bn |
| Yorkshire and the Humber | 27,433 | £6.3bn |
| East Midlands | 27,382 | £7.1bn |
| North East England | 12,202 | £2.2bn |
| Grand Total | 371,541 | £148.1bn |
JLL Research | August 2024
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