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The new government put housing front and centre just three days after taking office, which is reason alone to be cheerful, says Nicola Goldie, Head of Strategic Partnerships and Growth, Aldermore.
Following its landslide election victory, the new Labour government has already made its intentions on housing clear.
Fixing Britain’s broken housing market is a priority.
New Chancellor Rachel Reeves reiterated the party’s manifesto pledges to reinstate housebuilding targets, reform the planning system and make the mortgage guarantee scheme permanent within 72 hours of taking office.
Here's what we already know:
Reeves chose housing as the focus of her first major speech. She pledged to build 1.5 million homes during this parliament alongside the return of mandatory housing targets.
This is hugely ambitious and some will argue difficult to achieve. After all, the number of new homes registered tumbled 44 per cent last year compared to 2022, according to the National House Building Council (NHBC), and any government has limited power to influence private developers.
Reeves acknowledged they will also face local opposition to development, from so-called NIMBYs. She said it will still be up to local authorities to decide where new housing is built, but added, “We will bring back mandatory targets so the answer cannot always be no.”
The Government will urgently reform the National Planning Framework, consulting on changes before the end of July.
It will support local authorities with 300 new planning officers (paid for by taxing foreign homebuyers) and create a new taskforce to accelerate stalled housing sites.
The Labour manifesto also said they will ‘unlock the building of homes affected by nutrient neutrality without weakening environmental protections’ – a move which will be widely welcomed by the industry.
The Government will prioritise the development of previously used brownfield land and introduce a new ‘grey belt‘ category for what has been described as ‘ugly greenbelt’ (including scrubland and disused fuel stations), releasing more of this land to build homes.
Perhaps most interesting was Reeves’ announcement that ministers intend to use their powers for direct intervention in the planning system. She stated that the Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, Angela Rayner, “will not hesitate to review an application where the potential gain for the regional and national economies warrant it”.
A key manifesto pledge was to ensure new developments provide more affordable homes. Labour said it will change the ‘Affordable Homes Programme’ to make sure it delivers more homes from existing funding, and support councils and housing associations to build their capacity and make a greater contribution to affordable housing supply.
It will also prioritise the building of new social rented homes and protect existing stock by reviewing increased ‘right to buy’ discounts and increasing protections on newly built social housing.
New 'golden rules' for building on grey belt land will also require a target of 50 per cent affordable housing.
The Labour government made a manifesto pledge to abolish Section 21 ‘no-fault’ evictions as well as moving on wider rental reform after the previous government’s bill failed to make it onto the statute books.
The party has also pledged to extend ‘Awaab’s Law’ to the private sector.
As a buy to let specialist, Aldermore supports the aim to create a fair and thriving private rented sector that works for tenants as well as landlords. That includes rental reform, although this needs to go hand-in-hand with improvements to the court system to protect landlords.
The Labour Party has already announced it will make the current Mortgage Guarantee Scheme permanent (calling it Freedom to Buy). The current scheme was due to end in June 2025 under the previous government.
This should help first-time buyers and those with small deposits by supporting lenders to offer mortgages at high-loan-to-value (LTV) ratios, although full details have yet to be announced.
Aldermore already offers mortgages up to 95 LTV outside of the current Mortgage Guarantee Scheme, but the more competition in this sector the better for borrowers and the wider market.
Labour has pledged to keep mortgage rates low, which it plans to do with a combination of homebuilding, keeping inflation under control and creating economic growth and stability.
Of course, the Government isn’t responsible for setting lenders’ mortgage rates or the base rate, which is set independently by the Bank of England’s Monetary Policy Committee.
But consistency and stability in government – without any repeat of the 2022 mini-Budget – will help both the Bank of England and mortgage lenders to avoid some of the rate volatility we’ve seen in recent years.
Aldermore welcomes this opportunity to work with the new government to build a better, fairer housing market, across all tenures.
We already back first-time buyers, home movers, the self-employed, those with credit blips and landlords to go for it and we support a thriving, multi-tenure, affordable housing market.
There have been plenty of previous housing promises that have been broken and only time will tell as to how realistic the new government’s aims are.
But the decision to focus on housing just days after coming to power and the reinstatement of homebuilding targets highlights a recognition of the importance of this sector and a desire to get Britain building again.
Most importantly, we’re hoping for a period of political and economic stability.
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