In a wide-ranging speech to business leaders explaining how the government plans to generate growth, Chancellor Rachel Reeve’s outlined a number of essential building programmes.
In her speech Reeves highlighted the slow planning system in the UK. She promised government guidance on building major projects would be reviewed in order to support investments outside of the wealthy south-east of England.
One of the projects outlined is a plan to redevelop Manchester United’s Old Trafford football ground.
The Old Trafford scheme is expected to use public money to move three rail freight terminals blocking the redevelopment.
Greater Manchester mayor Andy Burnham has promised the scheme will mean 5,000 new homes and create a second “major football campus” in the city.
The Chancellor also talked of a “growth corridor” between Oxford and Cambridge, which she claimed could be “Europe’s Silicon Valley”.
Linked to this, Reeves announced plans for the University of Cambridge to open an innovation hub in the city centre, and this would also see the construction of 4,500 new homes, after the Environment Agency dropped its opposition.
There was a mixed response from the industry to Reeves’ speech.
Together’s chief commercial officer Ryan Etchells commented: “The Chancellor’s promise of our very own Silicon Valley linking Oxford and Cambridge is certainly headline grabbing but is insufficient to unlock growth for the majority of UK SMEs.
“The Government’s Levelling Up Agenda was meant to stretch right across the country. Singling out two of the wealthiest regions in the UK will in no way fully answer the larger growth and housing puzzle.
North/South divide
“Building homes in the Oxford-Cambridge corridor is one element, but without policy support those who don’t fit the ‘perfect mortgage model’ will still face challenges. And, overlooking regions which are in most in need to focus on the home counties and capital is troubling.”
Darlington Building Society head of mortgage distribution Christopher Blewitt took a similar line.
“It’s encouraging to see the Chancellor announce the plans for Oxford and Cambridge to build ‘Europe’s Silicon Valley’ which includes the building of new homes. It’s vital that as a nation we address the chronic shortage of housing stock across the UK to enable not only first time buyers to buy their own homes, but also to give a shot in the arm to the purchase market generally.”
“In our heartland, we’ve seen the average price paid by first-time buyers rising to £123,000 in November 2024 which was 7.8% higher than the average of £114,000 in November 2023 and so we hope this is the start of many such initiatives across the UK to make more affordable homes available.”
Planning process
Shawbrook managing director of development finance Terry Woodley commented: “Reducing planning red tape and streamlining processes is going to play a crucial role in delivering the ambitious 1.5million new homes target.
“Whilst it’s positive to see the Chancellor address this through the Plan for Change for working people, it’s not the only answer: a multi-faceted approach is needed to really address the issues currently facing developers.”
“It will be interesting to see the Government take its proposed next steps, which include streamlining a set of national policies for decision making to better guide planning decisions taken by local authorities.
“However, this doesn’t address the recruitment and training of additional planners which will take time, or the skills shortage in the sector. The Government must prioritise effective, comprehensive planning overhauls to kickstart progress and unlock the UK’s full housebuilding potential.”
Responding specifically the Old Trafford plan Etchells said: “While we’d agree that the football club should foot the bill for the re-development of the Old Trafford stadium itself, as a Manchester-based property lender what we need to see is how the Government plans to support this project in terms of wider regeneration of the area, which would provide fantastic opportunities for residential and commercial investors and developers.”
He added:” All eyes are on Labour to renew housing plans for The North and ensure plans for driving economic growth are carried out fairly – before tax hikes start to bite in April.”
