Construction across major UK cities outside London has sharply declined, marking a setback for Angela Rayner’s housing strategy. Deloitte’s regional crane survey reveals that new starts fell by 27%, reflecting the broader challenges the Labour Deputy Prime Minister faces in reviving the sector.
As Rayner pursues her goal of boosting housing development, the slowdown serves as a reminder of the immense obstacles that lie ahead. Political uncertainties, financial pressures, and mounting regulatory challenges are hindering her push to deliver on Labour’s promise of building 1.5 million new homes.
Subdued Construction Activity in Regional Cities
Deloitte’s regional crane survey reveals the extent of the construction slowdown in key cities outside London. Key data points from 2023 include:
- 47 new projects initiated across Leeds, Manchester, Birmingham, and Belfast.
- A 27% drop in new construction starts compared with 2022.
- 7% decline in the number of homes under construction, totaling 23,673 units.
Moreover, the decline wasn’t limited to residential projects. Notably, no new office, retail, or leisure projects were launched in 2023. While housing completions rose by 57%, reaching 9,075 homes, the broader construction sector has clearly struggled.
The slump in development is compounded by delays caused by safety regulations, particularly with high-rise buildings. Zoe Davidson from Deloitte commented that Building Safety Act measures have significantly delayed timelines due to extensive inspections required for buildings taller than 18 metres.
The Government’s Housing Crisis and Political Uncertainty
Angela Rayner’s government faces mounting pressure as it seeks to resolve the housing crisis. While the Government has committed to ambitious targets, the challenges remain:
- Building Safety Regulations: New regulations, including the cladding tax, are adding financial strain on developers and causing delays.
- Political Uncertainty: Ongoing instability, including the UK and US elections, is deterring investment and making developers reluctant to take on new risks.
- Planning System Bottlenecks: Despite political efforts to reform the planning process, red tape continues to slow down approvals and stifle new projects.
Despite these obstacles, the Government remains committed to its Plan for Change, which includes delivering 1.5 million new homes. Ministers are focusing on overhauling the planning system and allocating £5bn for housing investments in 2024. However, the construction industry faces a prolonged struggle as it adapts to the evolving landscape.
“Work is already underway to get Britain building again, including overhauling the broken planning system and investing £5bn in housing for this year, while the forthcoming Planning and Infrastructure Bill will help accelerate the delivery of critical infrastructure.” a spokesman said.
