Pledge on new homes ‘doomed’ without rethink

THERESA MAY’S promise to solve the housing crisis will fail unless councils make radical changes to planning, the National Audit Office (NAO) has said.

The Prime Minister has pledged to build 300,000 houses per year by the middle of the next decade, but the NAO said local authorities were using outdated methods to calculate how many homes were needed, meaning there would be an annual shortfall of 35,000.

Its verdict emerged on the day that a separate report found a million more people aged 20-34 were living with their parents than two decades ago, a rise of more than a third.

Increasingly, young people are being priced out of the housing market, largely due to a shortage of homes, but the NAO said half of all councils would fail to meet their housing targets next year.

The auditor said the Government’s planning system was “underperforming” because councils used outdated information to calculate how many new homes would be needed, meaning at best they would only build 265,000 homes a year between them.

The “flawed” method for assessing housing needs meant home-building was concentrated on London and the South East. For poorer regions, this “could hamper their plans to regenerate and stimulate economic growth”.

In addition, fewer than half of councils had a planning strategy that was less than five years old, and one in eight did not have a local plan at all.

If a local authority does not show it has a five-year supply of land for housing, it gives developers greater freedoms to build where they want and a local authority has less control over the location of developments.

The NAO said the Ministry of Housing, Communities and Local Government had only made a “rough estimate” of the costs of infrastructure, such as new roads and schools, required for new developments.

Meanwhile, a report by Civitas, the think tank, said the squeeze on housing had contributed to 3.4 million young adults living with their parents, up from 2.4 million 20 years ago.

Amyas Morse, the head of the NAO, said: “For many years, the supply of new homes has failed to meet demand … it is clear the planning system is not working well.

“The Government needs to take this much more seriously and ensure its new planning policies bring about the change that is needed.”

Kit Malthouse, the housing minister said: “I recognise the challenges identified by the NAO, and the simple truth is over the last three decades, governments of all stripes have built too few homes of all types.

“We are determined to build the homes this country needs … we are conducting independent reviews on build-out rates and planning inquiries,” he added.