It’s been one year since the Labour government campaigned to woo voters by pledging to build 1.5 million new homes, the Competition and Markets Authority delivered a scathing report on the industry’s failings, and Michael Gove stepped down ahead of the general election. Since then, housing targets have been reinstated, planning reform has moved forward – albeit slowly – and the government continues to blame developers for Britain’s housing crisis.
In 2024, just 217,911 homes were completed, the lowest total since 2017. Planning remains the biggest hurdle. Just over 30,000 residential projects were approved last year, from single homes to major developments, the lowest number since records began in 1979. The average decision time for large-scale housing schemes has stretched to over 33 weeks. Although economic headwinds such as high interest rates, weak buyer confidence, and reduced market activity have all contributed to the slowdown, long-standing delivery constraints remain unresolved.
The government has made changes to the National Planning Policy Framework, reintroducing local housing targets and pledging 3,000 additional planners to support delivery. There’s also been movement on brownfield development and the green belt has been on the table for building as a ‘last resort’ to ensure communities get the housing and facilities they need. Labour’s planning reforms are welcomed but are insufficient to achieve 1.5 million homes by 2029.
Affordability continues to cast a shadow over the market. House prices rose 6.4% in the year to March, taking the average UK home to £271, 415. Mortgage rates, while down from last year’s peak, remain high with the average two-year fix now at 5.07%. Nearly half a million homeowners are coming off low-rate five-year deals this year and facing steep increases in monthly payments. UK inflation rose more than expected to a 15-month high of 3.5% in April raising questions about when or how quickly interest rates might fall, keeping market conditions cautious for the foreseeable future.
Despite the challenges, the industry has shown resilience. Developers have held firm on output while navigating labour shortages, volatile costs, and planning delays. There’s optimism that rate cuts in the second half of this year could bring some relief. But frustrations are growing – Sir Keir Starmer has recently criticised developers for dragging their feet, suggesting that they are “deliberately sitting on land” and need to “get on with it.” It’s a tone-deaf message for a sector already stretched to capacity. The government continues to blame developers rather than acknowledge the structural issues stalling delivery.
With this, Labour announced new plans for developers including a commitment to build-out schedules before securing planning permissions. Councils would be able to fine housebuilders for delays and have new powers to seize land that hasn’t been built out and block future permissions from developers they deem to be under-delivering. The Home Builders Federation responded quickly, pointing out that multiple independent reviews have already disproven the idea that developers are deliberately sitting on land.
Starmer’s comments have left many in the industry questioning whether Labour truly understands the practical barriers to delivery. Political soundbites might win headlines, but they won’t get homes out of the ground. If Labour is serious about building 1.5 million new homes, it needs to work with developers and not against them.
