Housebuilders urge Rayner to ‘hit the ground running’ and rip up planning red tape
Housebuilders have called on Angela Rayner to “hit the ground running” and rip up planning red tape after her surprise comeback as housing secretary.
Rayner resigned as housing secretary in September over an investigation into her tax affairs but was cleared of wrongdoing in March this year.
Leading housebuilding figures told City PM they welcomed the former deputy prime minister’s return to the housing brief and urged her to take swift action to ramp up the government’s progress towards its housebuilding targets.
“We look forward to picking up the dialogue about how we get homes built,” a housebuilding trade body said. “That said, regardless of the new team to confront them, the same challenges remain both for the economy and for real estate in particular.”
Rayner inherits a monumental challenge upon her arrival at her former department after sluggish progress toward the government’s pledge to build 1.5m homes before the next general election.
This requires 300,000 new homes to be built every year, but analysis by the BBC has suggested that only 204,000 were completed in the year to March.
The situation facing housebuilders has worsened since Rayner quit in September. The Iran war has sent building costs soaring and hikes to mortgage rates have dampened demand for new homes.
Rayner ‘must move quickly’ on housing
London-listed housebuilding and construction firms posted eight profit warnings in the first half of this year, according to an EY report, including six in the second quarter.
Companies including Berkeley and Barratt Redrow have slammed the breaks on land buying in a bid to protect their margins. Last week, both Vistry and Crest Nicholson posted first-half losses of more than £30m.
One industry source said that they fear the collapse of a leading housebuilder is “basically the only thing that will get central government, particularly the Treasury, moving”.
But key figures in the industry said that Rayner’s return is a reason to be hopeful. Vanessa Hale, chief executive of industry body Real Estate UK, told City PM the sector worked “very productively” with the secretary of state during her previous stint and urged her to “hit the ground running”.
Andy Burnham’s appointment of John Healey as Chancellor and the continuation of Matthew Pennycook as housing minister offer “stability and a relatively known quantity” to the industry, Hale said.
Steve Turner, executive director of the Home Builders Federation, said he hoped Rayner will “move quickly to address the ongoing problems suppressing housing supply”.
“During her previous period as Housing Secretary she demonstrated a strong commitment to delivering more homes, helping to oversee some very positive planning changes. We look forward to re-engaging to explore how best to increase the supply of homes of all tenures,” he added.
Burnham made affordable housing a key pledge of his leadership campaign, promising to oversee the “biggest council house building programme since the post-war period”.
Vistry eyes council housing blitz
FTSE 250 housebuilder Vistry, which pivoted two years ago to focus on building homes for partners like councils and institutional landlords rather than for the private market, hopes to capitalise on Burnham’s pledge.
Chief executive Adam Daniels told City PM that its partnership model is “ideally placed to assist local authorities in delivering new council homes across a range of affordable tenures”.
“Vistry has a long and established track record of working in partnership with local authorities of all political colours across England to deliver new homes,” he added.
But some housebuilders warned that Rayner will need to ease the pressures facing the industry to revive any hopes of meeting Labour’s housebuilding targets.
“While we undoubtedly want to see more homes built, the cumulative impact of rising regulatory costs combined with continued planning challenges and affordability concerns is materially constraining the sector’s ability to grow,” said Shane Doherty, finance chief of FTSE 250 housebuilder Bellway.
Doherty called on Rayner to introduce a new equity loan scheme to encourage first-time buyers to enter the property market. A previous scheme, Help to Buy, was scrapped in 2023.
Housebuilders have warned that sluggish demand among first-time buyers is threatening their ability to back new projects.
Last week, FTSE 100 housebuilder Barratt Redrow called on the government to axe stamp duty for first-time buyers to boost the housing market, in a joint plea with homes portal Rightmove.
Paul Rickard, the chief executive of London-based housebuilder Pocket Living, warned Rayner that red tape like the incoming building safety levy risks disproportionately impacting small builders.
The levy, which will come into force in October, was introduced in the wake of the Grenfell Fire and aims to raise £4.3bn from housebuilders to repair unsafe cladding in existing buildings.