England is Ploughing Ahead with New Homes Plans – But What About Wales?

The UK Government has made much of its ambitious plans to build 1.5 million new homes over the next five years.

The Prime Minister and Deputy PM have repeatedly talked up their proposals in the media, promising to cut through red tape to deliver “high-quality, well-designed homes” and help more people get on the housing ladder.

They have also announced that more than 100 sites across England have come forward to be considered for the next generation of new towns. Together, these announcements amount to the largest housebuilding programme in the UK since the post-war era.

Meanwhile, here in Wales, the ambition is somewhat more limited. To its credit, the Welsh Government is determined to build more affordable homes, and last month it announced an additional £10 million in funding for affordable home schemes across the country.

But while this is positive, the Welsh Government also needs to acknowledge that there’s a significant under supply of new homes available on the open market.

Housebuilding activity in Wales has declined steadily over the last few decades, and the country is in the grip of an acute housing supply crisis. The last financial year, 2023/24, saw the second lowest number of new home completions (4,771) in Wales since records started in the 1970s. Only 2020/21 was lower (4,616), when homebuilding was stopped during the first Covid-19 lockdowns.

There are various reasons for this. Green initiatives, while well-meaning, have impacted how homes are built and ultimately their affordability. Building standards designed to improve energy efficiency, such as the requirement to install air source heat pumps, solar panels and better insulation, are good for the environment but add significantly to build costs.

These costs can’t be absorbed by developers, and have to be passed on to home buyers through increased house prices, when affordability is already a huge problem.

The Welsh Government is determined to reduce the carbon footprint of homes as part of its net zero agenda. This is an admirable aim, but the burden of legislation on housing developers is huge. A balance must be struck between the aims of the decarbonising agenda and the reality that Wales desperately needs to provide more homes for its citizens.

The PM has made much of the ‘blockers’ who are trying to stop new homes being built in England, with some criticisms aimed at planners and local authorities. Here in Wales, we find that local authorities are generally very keen to progress new housing developments, but many are suffering from a severe lack of resources, which often leads to long and unnecessary delays.

The planning process is slow at the best of times, but this is being exacerbated by a shortage of experienced planning officers. If there were more people working in planning departments to progress applications more quickly, then developers could build more houses and costs would fall. England’s councils will get £3 million of grants to bolster planning capacity. Wales could certainly benefit from similar funding.

There’s also a shortage of sites available for new housing development, leading to fierce competition between developers. This isn’t a Wales-specific problem, but in England the government has at least proposed reintroducing the requirement for local planning authorities to calculate a five-year supply of land for housing. Since this requirement was removed in Wales in 2020, local authorities have had less accountability when it comes to housing delivery. Reversing this would be a positive step.

Another positive step that the Welsh Government could take would be to set a national target for all home completions. While there’s a target to deliver 20,000 new affordable homes during this Senedd term, there isn’t one for open market homes. A similarly ambitious target to that set in England would go a long way to boost the housebuilding sector.

Action needs to be taken quickly at national and regional level in Wales to encourage new housing developments if we are to increase supply and ensure there are enough homes to meet the growing demand. England is ploughing ahead with change – Wales must not be left behind.