Labour is projected to miss its ambitious target of building 1.5 million new homes by half a million, according to figures released by the Office for Budget Responsibility (OBR). The party had vowed in its election-winning manifesto to significantly boost Britain’s housing stock over the next parliamentary term, aiming to 'get Britain building again' and create jobs.
However, the OBR's assessment indicates that the number of new homes constructed is likely to rise more slowly than previously anticipated. This downward revision is attributed to a combination of factors, including a struggling economy, high interest rates, and regulatory hurdles. The OBR has consequently lowered its forecast for new housing starts, projecting a shortfall of 190,000 cumulative additions to the housing stock compared to its earlier predictions.
The OBR cited broader pressures within the construction sector as a key driver for the revised estimates. These pressures include weak demand, increasing material costs, and the impact of regulatory changes. The OBR, which provides independent economic assessments, highlighted these issues in its report accompanying the Autumn Budget.
In response to the OBR figures, shadow housing secretary Katie Lam criticized Labour's policies, stating that their "taxes and red tape" have made building prohibitively expensive. Lam argued that this situation leads to reduced opportunities for individuals to enter the housing market and intensifies competition for available rental properties. She contrasted this with Conservative proposals to cut 'net zero red tape' and abolish stamp duty to alleviate building costs and assist first-time buyers.
Chancellor John Healey, in his Autumn Budget announcement, introduced several measures intended to stimulate housebuilding. These include extending cheaper borrowing options for local councils, making land sold to social housing providers VAT-free, and removing biodiversity requirements for certain brownfield sites. An additional £1.5 billion was allocated to Labour's social and affordable housing program, bringing the total government spending in this area to £40 billion. A new 'Your First Home' equity loan scheme, backed by £4.7 billion in taxpayer funds, was also announced for first-time buyers.
Healey also emphasized the government's commitment to reducing rough sleeping, earmarking an additional £430 million to provide pathways off the streets for all rough sleepers. However, he indicated a stance against continuous changes to building regulations, with exceptions made only for critical safety matters.