MPs caution that the assigned housing targets may fall short of producing 300,000 new homes annually

The Levelling Up, Housing and Communities (LUHC) Committee has raised concerns about the government's latest planning rules, claiming they are having a damaging impact on efforts to increase the building of new homes.

The committee, chaired by Clive Betts, has published a report that criticises the government for not providing sufficient evidence to demonstrate how scrapping mandatory local housing targets will lead to more housebuilding. The report also criticises the stop-start reform on national planning policy over several years, which it says has caused uncertainty for local authorities and planners, delayed local plans, and slowed new house building.

The government has set a target of 300,000 new homes per year by the mid-2020s in England. However, the committee's report suggests that the South East region of England may have difficulties meeting this target if mandatory local housing targets are abolished.

The standard method of calculating housing need, which focuses on housebuilding in areas where economic activity is already high, is found to be not fit for purpose, according to the report. The committee calls for a revised standard method that takes account of future local need and applies fairly to all local authorities. The report also calls for a substantial proportion of the 300,000 new homes to be social rent homes, with a target of 90,000 social rent homes per year suggested.

The new infrastructure levy, which the government announced in December 2022, has been criticised by the Mayor of London. He claims that developers in the capital city will be unable to keep up with costs due to the new levy, which could slow down the number of homes being built. Last week, the Mayor announced he wants the government to re-think its plans about introducing the levy, stating that it could interfere with plans to build essential new buildings such as schools and health centres.

The committee's report also criticises the government's failure to set out a comprehensive resources and skills strategy for the planning sector. The standard method, which is based on 2014-based housing projections, is also criticised for its arbitrary 35 percent uplift for urban centres.

The committee suggests that the revised standard method should encourage regeneration across the country, rather than focusing on areas with high economic activity. The report concludes that the government may struggle to achieve its target of 300,000 new homes per year in the mid-2020s if it continues with its current approach to planning reforms and housing targets.