Labour faces a significant challenge in meeting its pledge to build 1.5 million new homes by 2029, with current construction rates likely to fall short by approximately 200,000 homes, according to research from Land Value Calculator (LVC).
To achieve the party's manifesto target, builders would need to construct over 1,000 new homes each day, effectively doubling the current pace of construction. This accelerated rate would need to be sustained for the next three years. However, even during 2020, the best-performing year on record for housing construction, the average daily build rate was only 679 homes.
The LVC analysis states that the government is currently behind its required building rate by 200,000 homes. "No independent analyst currently thinks the Government is on track to hit its target," a spokesperson for LVC commented. While new-build starts have increased by 43 percent from their mid-2024 low, they remain below the rate needed to meet the target. At an annual pace of 130,170 homes, the construction rate is reportedly a quarter below 2023 figures and below the current completion rate.
Angela Rayner, who has been reappointed as Housing Secretary, has acknowledged the 1.5 million-home ambition as "a really difficult stretch target." Despite its challenging nature, Rayner has stated she is "not dropping it." The manifesto also includes a promise to launch a major council house-building initiative.
A spokesperson for the Ministry of Housing, Communities and Local Government expressed a differing view, stating that the LVC data does not account for expected increases in housebuilding as government reforms take effect. These reforms include measures to streamline the planning system, support for builders through a £16 billion National Housing Bank, and a £39 billion investment in social and affordable housing. The ministry reported a 15 percent year-on-year increase in housing starts.