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Angela Rayner dealt major blow as Labour set to break key election promise .hh

The Chancellor made the revelation about housing during her spring statement in the Commons.

Reeves backtracks on housing election pledge

Rachel Reeves backtracks on housing election promise (Image: Rachel Reeves)

Rachel Reeves said the spending watchdog had concluded the Government’s planning reforms would “help build over 1.3 million homes” in the next five years. This is less than the Government’s promise to construct 1.5million new homes.

The Chancellor said: “The planning system that we inherited was far too slow. The OBR have concluded that our reforms will lead to housebuilding reaching a 40-year high of 305,000 by the end of the forecast period. And changes to the national planning policy framework alone will help build over 1.3 million homes in the UK over the next five years taking us within touching distance of delivering on our manifesto promise to build 1.5 million homes in England this parliament. Homes promised by this Labour Government. Built by this Labour Government. Opposed by the parties opposite.”

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The figure, which is for England, was unveiled by Prime Minister Keir Starmer at his party conference in October 2023.

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The OBR’s report, published today alongside Ms Reeves’ spring statement, also sets out that Angela Rayner’s plans that will allow councils to concrete over the green belt will only contribute 170,000 of the forecast 1.3 million new homes by the end of the parliament.

In a humiliating blow to Labour’s pledge to make housing more affordable, the OBR says it expects average house prices to rise from £265,000 to £295,000 in 2029.

The forecaster also sets out that migration will see over 300,000 enter the country net every year between now and 2030, contributing to the rise in house prices and negating any benefits from the government’s house building drive.

Ms Reeves this week vowed £2 billion in grant funding to deliver up to 18,000 new homes in England will go some way to “fixing the housing crisis”.

The funding is described by the Government as a “down payment from the Treasury” ahead of longer-term investment in social and affordable housing expected to be announced later in the year.

The Government expects at least half of the 18,000 would be social homes, as charities urged that the “vast majority” should be for social rent amid record highs in homelessness across the country.

Last year, experts at the New Economics Foundation said 90,000 social homes would need to be built by as early as 2027/28 to meet the government’s target.

By the final year of this parliament, ministers would “need to go beyond this and deliver 110,000 new social homes to ensure 1.5 million homes are built”, the foundation said, amounting to a total of 365,000 social rent homes over the next five years to hit the target.

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