Labour to miss housing target by eight years

Labour is unlikely to meet its target of delivering 1.5 million new homes within five years, according to new research from property finance firm West One Loans. Based on the current pace of construction, the goal could take nearly 12 years to reach.

The housing pledge was a centrepiece of Labour’s 2024 general election manifesto. To hit the target, the government would need to add around 370,000 homes to England’s housing stock annually. However, West One’s latest data shows that almost a year into Labour’s term, housing starts remain far below that pace.

In the three quarters since Labour took office in Q3 2024, work has begun on 86,000 new homes across England. That compares with 68,080 starts during the previous three quarters under the former government. While this signals some progress, the average of 28,667 new home starts per quarter falls short of what’s required.

West One points out that around 89.8% of total net additions typically come from new builds, meaning Labour would need to deliver roughly 1.35 million new build homes to meet its broader housing target. At the current rate, it would take the government approximately 11.8 years to reach that figure — more than double the five-year goal outlined during the election campaign.

“The Labour government was quick to hang its hat on an ambitious target with respect to housing delivery,” said Thomas Cantor, co-head of short-term finance at West One Loans. “With previous governments having consistently fallen short, this was understandably met with a great degree of scepticism.

“Of course, it is still early days and Labour may well be in the process of laying the initial groundwork required to eventually pave the way for an explosion in new home delivery. But while it’s possible that they need time to overhaul planning rules, cut red tape, and prepare and incentivise the nation’s housebuilders to increase output, it’s already looking as though the task of delivering what was promised is running away from them.

“This will come as little surprise to the industry who have been consistently calling for further market stimulation via government intervention of monetary policy. We simply haven’t seen enough done in this respect, and given the lack of movement with respect to interest rates of late, the worry is that we aren’t unlocking the full potential of development activity at a time when it’s needed most.”

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