The Labour government is projected to fall short of its housing manifesto pledge by 662,500 homes, according to an analysis by the property firm Savills. The firm estimates that between 2024/25 and 2029/30, an average of 167,500 new-build homes will be completed annually in England, falling well below the government's stated target of 300,000 per year. This would result in approximately 837,500 new homes over the period, a shortfall of nearly 662,500 from the 1.5 million promised in the Labour manifesto.
During the 2024 election campaign, then-Prime Minister Keir Starmer committed to 'Get Britain building again' by streamlining planning processes, supporting first-time buyers, and utilizing green belt land. However, Savills' review of official data indicates a 39% decrease in planning consents for new developments over three years, reaching 180,000 in 2025.
Rising mortgage rates and increased debt burdens are also cited by Savills as factors dampening demand for new-build properties, making it difficult for developers to initiate new schemes. The firm anticipates a decline in new-build home sales, with the duration of geopolitical conflicts, such as the war in the Middle East, potentially influencing mortgage rates and the length of this downturn.
Recent data shows new-build completions decreased by 4.1% to 190,602 in the year ending March 2025. Savills noted that demand has been supported by grant-funded affordable housing, the build-to-rent sector, and developer sales incentives. Following the cessation of the Help to Buy scheme two years prior, new-build completions have declined by 10.2%.
In the three years leading up to December 2025, new-build development starts fell by 31% year-on-year. Savills forecasts that completion volumes will drop to just over 150,000 homes in both 2026/27 and 2027/28. The firm stated, "Development will be challenging in the short term. Low levels of planning consents and starts mean a more limited pipeline of homes under construction, while market demand is impacted by global instability and higher interest rates."
With the recent resignation of Keir Starmer, the responsibility for meeting new-build targets now falls to the government's next leader. Kelly Boorman, national head of construction at RSM UK, commented that Starmer's departure introduces further political uncertainty for the construction industry. While short-term projects may remain unaffected, Boorman suggested that mid- and longer-term infrastructure priorities, housing targets, and potential policy shifts could create additional unease within the sector.