According to its report, the developer would build commercial properties and affordable homes.
With housebuilding falling short of Keir Starmer’s one-and-a-half million homes target by 2029, the minister’s plans are a radical suggestion.
Neil Leitch, managing director at Hampshire Trust Bank (HTB), said: “Creating a state-owned housing developer doesn’t address the main constraint on housing delivery.
“Our recent SME developer research, backed up by the conversations we’re having with developers every day, points consistently to planning uncertainty, inconsistent decision-making and the growing complexity surrounding the planning process as the biggest barriers to bringing forward viable schemes.”
The Guardian said the plan will allegedly be piloted in a small area. Furthermore, the government would use funds allocated to Homes England to set up and independent body to oversee the housebuilding.
Aldermore Insights with Jon Cooper: Edition 9 – Why lending strategy is becoming more central in buy to let
Sponsored by Aldermore
Delays to housebuilding
Tariffs on steel, due to come into effect on 1 July 2026, pose a risk to housebuilding targets. The Construction Leadership Council (CLC) said proposed measures had already increased costs by 14-18% on live projects.
Quota volumes will be reduced by 51%, while any imported steel exceeding the quota will face a 50% tariff.
Beyond material costs, planning decisions are affecting delays.
In March, the government announced a £100m investment to speed up planning decisions.
Furthermore, on 16 June, it also unveiled planning for two new artificial intelligence (AI) tools being tested to halve decision times for planning applications.
Leitch said: “If government wants to make a meaningful difference, I’d rather see that effort focused on improving the planning system and creating greater consistency in planning decisions. Give developers more confidence in the process and they’ll bring forward more sites, commit more capital and ultimately build more homes.”
Despite this, Jewson’s ‘Let’s Get Britain Building NOW’ campaign said Britain is short of six-and-a-half million homes in total.
Leitch added: “The real opportunity isn’t creating another housebuilder. It’s creating the conditions that give the developers we already have the confidence to deliver more.”
