Housebuilding in the North of England must accelerate faster than in any other region to help meet the government’s national target of 370,000 new homes per year.
However, historical data on net additional dwellings raises doubts about Labour’s ability to hit these ambitious goals by 2030.
According to the latest forecast by West One Loans Local Housing Need figures – shaped by reforms to the National Planning Policy Framework (NPPF) – highlight significant regional disparities in housing requirements.
Under the updated framework, Local Housing Need requirements across England are set to rise by 21.4% overall.
SUSTAINABLE GROWTH
The NPPF reforms, coupled with wider changes to the planning system, aim to give local authorities clearer guidelines for achieving sustainable growth. The most recent consultation took place between July and September last year.
A key proposed change is the introduction of a national housebuilding target of just over 370,000 new homes annually. At the local level, the government also plans to remove or revise intervention criteria to counteract Nimbyism and prevent opposition from halting much-needed developments.
GREATEST NEED
West One Loans’ research reveals that the North East of England faces the most significant increase in housing demand. The region’s previous annual target of 6,123 homes has surged to 10,976 under the new methodology – a staggering 79.2% rise.
The North West has also seen a sharp increase, with annual housing requirements climbing by 61.3%. Other regions experiencing substantial hikes include the South West (41.8%), South East (37.9%), and Yorkshire and the Humber (33.5%).
HOUSING TARGETS
Despite these revised targets, historical data suggests Labour’s goal of delivering 370,000 new homes per year may be overly optimistic.
The government typically measures housing supply by net additional dwellings – a metric that includes not just newly built homes but also conversions, changes of use, and gains offset by demolitions. This approach can paint a rosier picture of housing delivery than the reality of new-build construction.
In the 2017 Autumn Budget, the government pledged to achieve 300,000 net additional dwellings annually by the mid-2020s – a target it has consistently fallen short of. The closest it came was in 2007/08, with 223,534 net additions.
Recent years have shown little improvement. While 2021/22 saw the highest figure in over a decade at 234,462, there has been no steady upward trend. By 2023/24, the number of net additional dwellings had actually dropped to 221,071 – just as the original mid-2020s deadline arrived.
HIGHLY AMBITIOUS
Guy Murray, Co-Head of Short-Term Finance at West One Loans, says: “Our new Labour government has hit the ground running with its focus on housing delivery, and the introduction of grey belt land classification is a positive step forward. However, the target of 370,000 new homes per year seems highly ambitious, especially given the previous government’s struggle to achieve 300,000.
“To genuinely boost housing supply, developers need stronger incentives. This could include tax breaks, grants, or streamlined planning processes, such as relaxing zoning restrictions.
“Ultimately, though, the biggest driver of new housing is market demand — and so far, we’ve seen little from the current government to stimulate buyer confidence. Failing to extend the stamp duty relief thresholds beyond March only adds to these concerns.”
