Labour is on track to miss its housebuilding target after planning permission for new homes tumbled to a record low.
A bleak report by the Home Builders Federation yesterday dealt a blow to the Government’s vow to build 1.5million properties by 2029.
Stark figures show Labour is falling short of its target by 170,000 homes a year. Industry leaders said the data was ‘disastrous’ and without urgent support from ministers there is ‘little chance’ of reaching the goal.
Just 39,170 homes were given planning permission in England in the first three months of the year – the lowest quarterly figure since records began.
That was a 55 per cent drop on the previous quarter and almost 32 per cent lower than a year earlier. The 225,067 units given approval in the 12 months to the end of March was the worst performance in 12 years.
The federation said its data ‘starkly illustrates the urgent need for Government to address the barriers to housing supply’ if they are to get ‘anywhere near the much-vaunted’ target.
A lack of support for first-time buyers, overstretched planning departments and high taxation has squeezed housing development, the trade association said. It also cited a problem with housing associations failing to buy tens of thousands of new homes designated for social and affordable rents.
Stark figures show Labour is falling short of its target by 170,000 homes a year. Industry leaders said the data was ‘disastrous’ and without urgent support from ministers there is ‘little chance’ of reaching the goal
Meanwhile, builders could be required to install solar panels on the ‘vast majority’ of new homes in England, according to Energy Secretary Ed Miliband (pictured)
Chief executive Neil Jefferson said: ‘The latest planning figures are disastrous for an industry and a government looking to increase housing supply over the coming years.
‘Unless urgent interventions are made, there seems little chance of us building the homes we know are desperately needed.’
Around 200,000 homes are being built each year, below the 370,000 target, the figures show.
The number of new developments approved in the first quarter of 2025 was 2,018 – the worst quarterly figure in 20 years.
The HBF called on ministers to introduce support for first-time buyers which could lead to the construction of an extra 100,000 homes.
Investment in high-rise blocks has ‘collapsed’ due to delays at the Building Safety Regulator which ‘has been unable to deal with its workload’, the group said.
There is also a shortfall of 2,000 local council planning officers, and new taxes have ‘ballooned’ since 2020, putting pressure on builders.
A housing department spokesman said it is ‘taking decisive action’ to speed up the planning process and that its ‘seismic reforms will help drive UK housebuilding to its highest level in over 40 years’.
Meanwhile, builders could be required to install solar panels on the ‘vast majority’ of new homes in England, according to Energy Secretary Ed Miliband.
It comes a month after No10 confirmed the panels should be installed on as many new properties as possible amid speculation that ministers will make them a mandatory requirement on new builds by 2027.
Labour on course to MISS 1.5million homes target despite making it easier to to build on the Green Belt – and mortgage rates are forecast to rise
Labour is on course to miss its target of building 1.5million new homes by the end of this parliament, Rachel Reeves admitted today as experts warned of more pain ahead for homeowners and buyers.
The Chancellor insisted she was within ‘touching distance’ of hitting the target after the Office for Budget Responsibility (OBR) forecast 1.3million homes would be built across the UK by the 2029-30 financial year.
Under plans set out by Housing Secretary Angela Rayner last year, Labour wants to build 1.5million in England alone by 2029.
The economic watchdog also forecast that mortgage rates will increase over the course of Labour’s term in office, peaking at an average of 4.7 per cent in 2028 and staying at that rate for the rest of the decade.
There was also a blow for first time buyers and those seeking to get larger properties as the OBR revised up its October forecast of house prices.
It now believes the average price of a home will rise from £265,000 in the final quarter of 2024, to around £295,000 in 2029.
It also said that the planning reforms designed to ‘get Britain building’ would hold down prices by just 0.8 per cent in 2029.
The Chancellor insisted she was within ‘touching distance’ of hitting the 1.5million target being spearheaded by Angela Rayner
The Office for Budget Responsibility (OBR) forecast 1.3million homes would be built by the 2029-30 financial year.
The economic watchdog also forecast that mortgage rates will increase over the course of Labour’s term in office, peaking at an average of 4.7 per cent in 2028 and staying at that rate for the rest of the decade.
Ms Reeves said: ‘The OBR have today concluded that these reforms will permanently increase the level of real GDP by 0.2 per cent by 2029-30, an additional £6.8bn in our economy and by 0.4 per cent of GDP within the next 10 years an additional £15.1bn in our economy.
‘That is the biggest positive growth impact that the OBR have ever reflected in their forecast, for a policy with no fiscal cost.
‘And taken together with our plans to increase capital spending this Government’s policies will increase the level of real GDP by 0.6 per cent in the next 10 years.’
The updated national planning policy framework (NPPF) commits to a ‘brownfield first’ strategy, with disused sites that have already been developed in the past prioritised for new buildings.
The default answer when a developer seeks to build on brownfield sites will be ‘yes’, but the Government says these sites will not be enough for the number of homes needed.
Councils will be ordered to review their greenbelt boundaries to meet targets by identifying lower quality ‘grey belt’ land that could be built on.
The framework defines the grey belt for the first time as green belt land that ‘does not strongly contribute to green belt purposes’.
Those purposes include limiting urban sprawl, stopping neighbouring towns merging into each other and preserving the special character of historic towns.
Safeguarding the countryside from encroachment and assisting in urban regeneration are no longer included as green belt purposes.
Rachel Reeves told MPs: ‘The planning system that we inherited was far too slow. The OBR have concluded that our reforms will lead to housebuilding reaching a 40-year high of 305,000 by the end of the forecast period.
‘And changes to the national planning policy framework alone will help build over 1.3 million homes in the UK over the next five years taking us within touching distance of delivering on our manifesto promise to build 1.5 million homes in England this parliament.’
UK households will have more disposable income over the next few years, but living standards will stall as businesses pass on higher taxes through lower wages and welfare measures are cut, new forecasts show.
New OBR projections show real household disposable income (RHDI) per person will grow at about 0.5 per cent on average each year between 2025 and 2030.
Stronger wage growth means this is higher than the last forecast, which was published in October alongside the autumn Budget statement.
However, the OBR cautioned that disposable income growth will vary significantly around the five-year average.
It is set to drop sharply from about 2.5 per cent in 2024-25, to almost zero growth in 2027-28.
This will be driven by several factors, the forecasters found, including lower wage growth as firms rebuild their profit margins.
Wages will also be hit by businesses passing on higher employer national insurance contributions to staff, while many workers will also be impacted by so-called ‘fiscal drag’.
This is when people are dragged into a higher tax bracket if their salaries rise, but thresholds for tax rates stay the same.
Furthermore, living standards will be affected by a rising state pension age and new welfare measures, the OBR found.
