Housebuilding to fall for three years as red tape scuppers Labour’s new homes push

The UK's housing construction progress is set to slow for three more years, according to the fiscal watchdog Office for Budget Responsibility (OBR). Housing output is expected to fall to 229,000 homes this year, 221,000 the following year, and 219,000 in 2027-28. The OBR has revised its outlook downward due to rising building costs and the burden of red tape on builders.

The watchdog had previously predicted an increase in housing construction in 2027-28 due to government planning reforms, but the Iran war has imposed additional challenges. Labour had pledged to build 1.5 million homes by the end of the current Parliament, but Housing Secretary Angela Rayner has downgraded this target, calling it "stretch."

Steve Turner, executive director of the Home Builders Federation, criticized the OBR's previous targets as "far too ambitious," citing constraints such as weak demand, rising material costs, and the impact of other regulatory changes. The OBR attributes part of the slowdown to the government's regulatory and fiscal changes, including the building safety levy, new biodiversity regulations, and higher corporation taxes.

Housebuilder Vistry CEO Adam Daniels praised the government's support for first-time buyers and affordable housing but warned that the broader housing agenda remains at risk unless the regulatory burden and construction costs are addressed.