Handing over the keys?
If the pollsters have got it right, July 4 will see the Conservative Party handing Labour the keys to Number 10, with significant implications for the UK housing industry.
If the polls are wrong, however, and the Conservatives remain in power, what can we expect from the party as it looks to build on previous housing policy?
In this blog post, we discuss what both outcomes might mean for the sector, and how housing providers can keep up with the pace of change with the right digital solutions.
Building targets: Labour
Labour has said it plans to build 1.5m new homes within 5 years, with priority given to first-time buyers. This will lead to the creation of ‘new towns’, with much of the building taking place on brownfield/greenfield sites and urban areas. To achieve this, Labour will aim to circumvent local planning objections, which they say hamper development.
The project will involve working with private sector companies, housing associations, and local authorities, requiring plenty of joined-up thinking – project managers will need to be at the forefront of operations, with efficient digital tools to help organise workflows.
These digital tools can aid in the timely delivery of project targets through accurate resource allocation, intelligent scheduling capabilities, and clear supply chain visibility. They should also streamline risk and governance, and help reduce maverick spend.
Building targets: Conservatives
In 2019, the Conservative party announced plans to build 300,000 homes by the mid-2020’s. While this was caveated in 2022 as ‘advisory’, the party continued to stress the need for new homes at the 2023 Conservative Party Conference. As it stands, the party has overseen the creation of 230,000 new homes per year since 2019.
The party is slightly more reserved than Labour when it comes to local planning laws, instead suggesting it will push local councils to allow development on brownfield land, and accept more flat conversions.
The extra resources required for the successful delivery of these new projects will require the government to ramp up its digital transformation efforts, both centrally and locally. In turn, housing providers will need to ensure they have the right digital systems in place to support efficient workforce management and resource allocation.
Looking at legislation: Labour
The recent scrapping of the Renter’s Reform Bill – years in the making – has been met with surprise by many in the housing sector. However, Labour has promised to rapidly dismantle Section 21 of the Housing Act 1998 – legislation that gives landlords the right to evict tenants without reason.
The findings of a recent Labour-commissioned review suggest the party will build on the stipulations of the Decent Homes Standard, extending the rights of both social and private renters. This is likely to include a mandatory National Landlords Register and enhanced rent controls.
Labour says its 5-year building plan will require partnership with private developers. This will be carried out under the proviso that at least 40% of new homes are deemed affordable. The party will increase pressure on developers to deliver on their commitments by making challenges more difficult.
Looking at legislation: Conservatives
Narrowly making it through parliament before doors closed for the election, the Leasehold and Freehold Reform Act makes it easier for leaseholders to buy their freehold and increase lease extensions. It also bans the sale of new leasehold homes, meaning that all newbuilds in the UK will become freehold from the outset.
Building on the Social Housing Act 2023, new consumer standards were released in April 2024 designed to improve housing quality and tenant safety. The revised regulations will require housing providers to improve communication with tenants and evidence the maintenance of homes to a high standard.
A further legislative addition to the Act concerns how landlords must deal with tenant complaints. The Complaint Handling Code reduces the complaints procedure to a 2-stage process, with clear times set out for responses. It requires landlords to provide tenants with clarity on how to access the complaints procedure and the Housing Ombudsman.
Keeping an eye on procurement – central and local government
New procurement rules, due to ‘go live’ at the end of October, mean that public contracting authorities will have to adhere to strict obligations surrounding transparency notices and supplier KPIs.
The Act will mean big changes for housing providers; procurement leads will need to be given a seat at the top table and become central to decision making. For most organisations, this will require a significant cultural shift.
While designed to simplify procurement, the Act will nonetheless result in additional bureaucracy. As such, housing teams will need to look towards efficient digital systems that ensure data is centralised, easily accessible, and safe.
What are the stumbling blocks for Labour?
To successfully achieve its building aims, Labour has said it will need to build on the greenbelt. And while the party promises it will not build on ‘genuine nature spots’, its plans will no doubt be of concern to environmental campaigners, local residents, and local authorities looking to stick to their Net Zero commitments – Labour may face challenges here.
Cost, of course, is another potential stumbling block – construction costs have skyrocketed recently, and the first quarter of 2024 saw a 13% fall in the number of new builds. Although house prices have started to show minimal growth, persuading private developers to build en masse may prove difficult.
Given the scale of Labour’s plans, local authorities, housing associations, and private developers may not have the capacity for effective delivery. Already stretched and under resourced (attracting enough skilled construction workers is a particular problem), the housing industry may find it hard to keep pace with demand.
What are the stumbling blocks for the Conservatives?
As per Labour, the Conservatives could find their mass building efforts hampered by rising construction costs. Economically advantageous tenders should be considered, but these must be balanced against both construction quality and environmental sustainability.
Given the shortfall in budgets for local authorities, the party may find it difficult to come up with the extra funding needed to boost their development plans. Critics argue that persuading councils to build on brownfield sites and convert existing properties will have minimal impact.
A lack of party-wide clarity on housing and renting reform could make meaningful change difficult. Opposition to key tenets in the Renters Reform Bill, for example, saw long delays before the bill collapsed when parliament closed its doors ahead of the election on July 4.
Summary
Whether either party can pull off their house building plans as promised remains to be seen. Cost is certainly a big issue, and environmental sustainability cannot be ignored. At the same time, legal challenges could halt progress – particularly when it comes to building on the greenbelt.
Along with these challenges, housing providers must adapt to recent legislative changes, and begin to prepare for the provisions of the Procurement Act 2023, due to go live in October. This will require housing providers to ensure they have optimised digital systems in place that drive efficiencies, foster organisational change, and keep data protected.
If you work in the housing sector, don’t miss the OneAdvanced Housing Summit on 19 September 2024 in London. FREE to attend, the event brings together some of the UK’s leading industry experts, with the chance to network and gain invaluable insight – register today!