The (Silent) Partnership
JLL's Head of UK Research & Strategy Adam Challis reflects on housing targets
In a back to the future moment, Labour has set out a serious intention to build more homes. 1.5 million of them in fact, over the course of the next parliament. That this has never, ever been achieved before is no matter. It's directional and encouraging.
Back in its 2019 manifesto, Government set out the same 300,000 home target, only to relinquish it as it proved too ambitious, especially through the pandemic and accelerated build cost inflation of the last 18 months. Notwithstanding the external factors, housing practitioners are all too familiar with the yawning gap between ambition and reality, time and again.
Affordable housing delivery is hard. Nothing new there. And it's expensive; ditto. The problem is that it has been too hard and too expensive for too long to be ignored anymore. As the adage goes 'subsidised housing needs subsidy'. The question isn't so much about which goal and whether it can be achieved, but how it will be paid for. With the current state of public finances, this should be read as a rhetorical question.
Private sector funds stand ready and waiting to fill the breach and to make a real difference. But don't expect to read about it in the press, or to hear politicians talk about it on TV. The irony of being pro-economy and pro-growth but at best business neutral is not lost on the real estate community. However, it is exactly the tightrope that politicians will attempt to balance on for the next 12-15 months.
But make no mistake; the next Government has no fiscal wiggle room to deliver the homes this country needs. Not even close. Nor will it want to, given the difficult trajectory for deficit reduction. As the Economist notes week commencing 9 October, there is no difference between Labour and the Conservatives on this point.
Investors, developers and housebuilders may be reluctant bedfellows for Government, but bedfellows we will be. And after the torrid year that 2023 has been, it should be welcomed.
2024 will be a foundational year. Build new relationships, get to know or deepen them with planning authority and Homes England counterparties that will be essential for progress in public/ private delivery. Be the funding and delivery solution that this country needs, that this Government wants - even if publicly it remains critical of industry activity.
Forget 'survive to '25'; we will 'thrive in '25'. Just don't expect any credit for it.
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