Ministers warned of decrease in house building

Allegra Stratton
Political editor, BBC Newsnight
@BBCAllegraon Twitter

  • Published
Work on a new housing developmentImage source, Getty Images
Image caption,
The PM said in January that new housing starts were up 16%

The government is exploring emergency measures to kick-start house-building, amid an expected decrease in new build this year, BBC Newsnight has learned.

In leaked documents, officials warn the last set of figures before the 2015 general election will reveal house building to have decreased by 4%.

House building is likely to loom quite large as an election issue.

The government said pressure would be brought to bear on "slow-coach councils" to deliver on new build.

The decrease is worrying the government after it expended quite considerable political capital on planning reform and other measures to boost house building.

Sensitive documents

The official assessment passed to Newsnight suggests that the number of houses started in the UK will go down this year.

That figure will be released in February 2015, three months ahead of the general election.

Labour leader Ed Miliband attacked the prime minister in January of this year, saying that house completions were at their lowest level since 1924.

Image source, PA
Image caption,
George Osborne lent a hand on a recent trip to a housing development

David Cameron responded at the time: "Housing starts in the last quarter were at the highest level for five years … and there has been a 16% increase in housing starts over the past 12 months compared with the year before."

Now, in a document produced by the Department for Communities and Local Government (DCLG) and marked "sensitive", officials project housing starts will go down.

It reads: "DCLG expect a decrease in the number of houses started this year: down from 133,650 in 2013/2014 to c.128,000 in 2014/15 (-4%)."

Unflattering snapshot

It goes on: "The last data on house building for this parliament is due in Feb 2015 for period to Dec 2014."

The internal projections show house building will then pick up in the year 2015/2016.

But there is such concern within government about this unflattering eve-of-election snapshot that politicians have been scouring their policy cupboard for ways to increase house building.

On another page of the document passed to Newsnight, the DCLG says: "9,000 sites for 350,000 homes with full planning permission haven't started building."

Image source, Getty Images
Image caption,
The document says work has not yet started on 9,000 sites with planning permission

It suggests that the DCLG "could accelerate starts on sites with permission in current programmes".

One area policy programme highlighted is the "right to buy 1-1 replacement".

Councils are now meant to build a replacement home when they sell one off under the right-to-buy programme - the scheme that was introduced by Margaret Thatcher.

Receipts retained

The DCLG document reveals that some are not doing this.

Instead, the document says, under the right to buy 1-1 replacement, "20 councils each retained £5m+ in receipts but started fewer than 30 replacement homes. £50m of receipts held by these councils for over 12 months. No incentive to start early".

Housing minister Kris Hopkins said: "We've delivered 445,000 new homes over the past four years and housing starts are now at their highest since 2007 but we're going further, building on the success of schemes like Help to Buy to get Britain building and investing billions of pounds in new affordable homes.

"For years the right to buy was allowed to wither on the vine, but our reinvigorated scheme has changed all that, with nearly 3,000 homes started thanks to the receipts from sales.

"I'll be bringing pressure to bear on the small number of slow-coach councils that need to raise their game to meet what they have signed up to do and deliver the new homes their communities rightly expect."

Hilary Benn MP, Labour's shadow communities and local government secretary, said: "This leaked document lays bare the stark truth of this Tory-led government's failure on housing.

"Despite endless ministerial announcements and claims, officials are advising them in private that housing starts are astonishingly set to fall."