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Mark Garnier
for Wyre Forest

Labour's housebuilding plans are not good economics

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Wednesday, 14 August, 2024
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Planning is an issue that never fails to be contentious. From the unwelcome extension on a neighbour’s property, to the thousand or more residential developments on the outskirts of towns, planning never fails to raise objections.

Its fair enough. Some criticise objectors as NIMBYs – not in my back yard-ers. But I opt to see them as people who value their communities and worry about changes. Of course, everyone’s home, as some point, was seen as an unwelcome development by someone. But now they form part of our communities.

Wyre Forest District Council has done a good job of bringing through the local plan – the agreed zones for development to deliver nearly 5,000 new homes over the next decade or so. It wasn’t easy, but they got there with broad community acceptance. But now, it seems, they will have to potentially double that number.

The new government has made pledge to build 1.5 million homes over the next 5 years, promising that this will boost our economy. It is an extraordinary proposition and will force WFDC to find space for thousands more houses.

The fundamental basis of their plan is wrong. Increased house building does, indeed, track economic growth. But house building, driven by increased confidence, follows a growing economy: It never leads it. The reason is simple. People feel more confident, and they want to buy a home. That increased demand underpins housing development, increasing confidence that house prices are stable and probably about to rise.

But presenting the argument the other way round, that house building will promote growth, is a tricky one to argue. Force more supply of homes onto the market and the price drops. This runs a risk of undermining the banks (again).

But the logistics of the government’s plans don’t stack up either.

They propose to find thousands more planning officers. They expect there to be all those workers in the construction sector. Raw materials will suddenly appear from nowhere. And communities like ours, here in Wyre Forest, will be expected to welcome with open arms a doubling of the housing supply on our green spaces.

Houses are important. I agree that we need more homes, and the local plan here delivers that. But house builders expect to sell around 1 new property, on each development, per week. That reflects the demand that they cater for. Force them to double that supply, and the demand won’t double unless the price falls. This is not good economics.

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