Why Labour’s failure to ‘build baby build’ is a boon for landlords – BuyAssociation Group

Housing ministers and their departmental bosses often have short careers at the top of the Ministry of Housing, Communities and Local Government, in part due to their unrealistic political promises on house building.

In recent times, this has included Michael Gove, Greg Clarke, and Angela Rayner, all of whom have had short tenures in office.

And Steve Reed, the current housing minister, is increasingly looking like the next candidate for the chop.

He and his subordinate, the housing minister, Matthew Pennycook, have been promising for nearly two years that the planning process will be sped up.

Reed’s ill-advised Trump-style promise to ‘build baby build’

And yet the latest data from the dull Badlands of planning policy is that it remains the key reason why Britain is not building enough homes despite Reed’s ill-advised Trump-style promise to ‘build baby build’ (he wore a hat emblazoned with the phrase in a recent Instagram video). But despite such frippery, the house-building pipeline remains limp.

The most recent ‘net additional dwellings’ data, which is the figure Whitehall officials use to gauge house building, shows that Labour’s promise to build an additional 1.5 homes during the current parliament (2024 to 2029) looks unlikely. The current run rate is 200,000 homes a year if you’re generous, so a million new homes will have been built by the time of the next election – 500,000 fewer than promised.

It is good news for the sector

But what has this to do with private landlords, you might ask? From a business perspective, it is good news for the sector, albeit bad news for private tenants, who face ever-rising rents and a growing impression that Labour is not delivering the ‘change’ it promised.

For landlords, it’s been good – many have operated within a private rented housing market where rents have been rising, official ONS statistics show, almost always at a higher rate than inflation, particularly in high-density areas such as London and the Midlands.

But Labour wants to end this and the line, oft repeated by ministers, is that by building more homes both to buy and rent, demand for private landlord properties will drop and rents will reduce.

Wrong-footed by their own ideology

The trouble is, politicians like Pennycook and Reed are always wrong-footed by their own ideology; for example, their controversial Renters’ Rights Act is designed to rebalance the power between landlord and tenant and, it is claimed, make renting fairer. But this will, and already has, reduced the number of landlords willing to weather such a storm of red tape and fines for non-compliance, something some Labour activists have celebrated in the past.

And who will provide rented homes in the future? The Government says it will be the big-money ‘build to rent’ sector. But the latest figures from the British Property Federation (BPF) show this to be a fantasy. So bad are the delays within the planning system that the organisation has been prompted to highlight how it is taking 15 months on average to secure planning permission for new BTR projects, 150% longer than the statutory time limit. In London, it takes a jaw-dropping six years.

Heads are likely to roll

While the BPF has welcomed Labour’s proposed reforms to the planning process, it warns that a lack of planners to do the work, and likely weak and long-winded implementation locally, will stymie any potential gains.

I feel that as the next election looms and the PM (whoever that might be) decides house building is a political hot potato, heads are likely to roll.