Labour’s promise to build 1.5 million homes across the UK within five years is set to fall short. Since the party won the election in mid-2024, fewer than 500,000 homes have been built, according to estimates from property experts. The government’s independent budget watchdog, the Office for Budget Responsibility (OBR), now forecasts 1.14 million completions over the five-year period.
That total would also be below the number delivered under the previous Conservative government during its shorter term from 2019 to mid-2024, despite the pandemic lockdowns in 2020 and 2021. The housing ministry has described the 1.5 million figure as an ambition to strive for, while a Conservative opposition spokesperson said Labour had failed to deliver its pledge.
The construction industry says that higher taxes and requirements are adding to costs. One concern is the requirement for a larger share of new homes to be classified as affordable, which critics say can make projects less attractive to investors. The Home Builders Federation acknowledged that some easing of planning rules could help, but argued that tax increases and cost-raising regulations remain unresolved. Higher energy and materials costs in England are adding further pressure.
Construction activity has also been affected by inflation and higher interest rates. Although there have recently been signs of stabilisation, the sector’s downturn has lasted as long as the slump that followed the 2008 global financial crisis, according to the report. Insolvencies among construction companies rose by 21% in the first nine months of the year.
Labour has pressed local authorities to make more land available and speed up planning approvals, with limited results so far. The government also eased rules on building in some parts of the Green Belt, but the change has not produced the anticipated increase in construction. A separate proposal for around a dozen new towns, each with at least 10,000 homes, remains at an early stage; five proposed locations have been removed and there is no confirmed start date for the projects.
A government-backed Help to Buy programme for first-time buyers is expected by property firm Savills to stimulate no more than 25,000 new homes by 2029. Meanwhile, a promised social housing programme described by Andy Burnham as the largest municipal building plan since the postwar period has not been repeated since its announcement a few months ago.
Sources: FAZ.