Labour Set to Miss Ambitious Housing Target by Nearly Half, Says Savills

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Labour Set to Miss Ambitious Housing Target by Nearly Half, Says Savills

 

The Labour government is on course to fall significantly short of its pledge to build 1.5 million new homes by 2029, according to research by property firm Savills. The forecast indicates that only around 840,000 homes will be completed during Labour's first five years in power, just over half of the promised total, due to dwindling demand and a marked decline in planning approvals.

 

The Home Builders Federation (HBF) revealed that only 39,170 new homes were granted planning permission in England during the first quarter of 2025, marking the lowest quarterly figure since 2012. While the Ministry of Housing, Communities and Local Government insists that the 1.5 million homes target remains intact, it concedes that the figure represents “a stretching target.”

 

Developers have long expressed skepticism about the feasibility of building that many homes within five years. “All indicators for housing supply continue to stagnate or go backwards,” said Neil Jefferson, chief executive of the HBF. Dan Hill, a researcher at Savills, emphasized that the ambitious goal could only be achieved through robust government support to boost demand. “Very significant demand support” is required, he said, likely in the form of a new Help to Buy scheme or similar initiative. “Developers will only build what they can sell,” Hill noted.

 

The Help to Buy scheme, which was instrumental in assisting first-time buyers for years, ended in March 2023. Its absence has left prospective homeowners without any form of government-backed assistance for the first time in six decades, compounding challenges for both buyers and developers.

 

There is also growing concern that the upcoming spending review may introduce cuts to the housing budget. Such a move, industry leaders warn, could further tighten the already constrained supply of homes. A coalition of housing providers recently penned a letter to Housing Minister Matthew Pennycook, warning that many social housing providers “are struggling to fund required improvements to current housing portfolios, let alone deliver new homes” due to rent control restrictions.

 

Even if demand were to rebound, Hill warned that “building volumes will be constrained by the speed at which the housebuilding sector can expand its supply chains and labour force.” Labour’s target would require annual housing completions to reach an average of 300,000 homes — a considerable leap from recent figures.

 

Between 2019 and 2024, during the five years prior to Labour’s election victory, an average of 207,000 homes were completed each year in England, according to Savills. The most recent government statistics show that 198,600 homes were built in the year leading up to March 2024. Based on current trends, Savills now expects home completions to average just 167,000 per year from 2024 to 2029 — a figure that, if accurate, leaves the government far short of fulfilling one of its most high-profile promises.

 

As developers hold back amid uncertain market conditions and planning approvals continue to decline, the prospect of hitting Labour’s housing target appears increasingly remote. Without substantial policy shifts or renewed financial support for homebuyers, the UK’s housing shortage looks set to deepen in the coming years.

 

  Adapted by ASEAN Now from The Times  2025-06-10

 

 

[blaze master]

Surprise. Another inept government.