The Labour government is set to fall significantly short of its flagship pledge to build 1.5 million new homes in England by 2029, according to official figures from the Office for Budget Responsibility (OBR). The revelation comes despite Chancellor Rachel Reeves’ confident claims in her Spring Statement that planning reforms would bring the government “within touching distance” of its target.
The OBR’s analysis reveals that only around 1 million new homes are likely to be built in England during this parliament – just two-thirds of the ambitious target set by Deputy Prime Minister Angela Rayner. While Reeves cited a figure of 1.3 million homes when addressing MPs, this included projected construction in Scotland, Wales and Northern Ireland, masking the substantial shortfall in England.
The watchdog’s figures show that Rayner’s much-touted planning reforms – including mandatory housing targets for local authorities – will generate just 170,000 additional homes in England, a mere quarter of what’s needed to meet the government’s goal. Crucially, the OBR notes that most of the projected 1 million homes would have been built even without these policy changes.
The housing shortfall comes despite Reeves highlighting construction growth in her Spring Statement, where she announced housebuilding was set to hit a 40-year high, contributing £6.8 billion to the economy. Industry experts have warned that planning changes alone won’t solve the crisis, with the Home Builders Federation calling for urgent action to improve mortgage accessibility for first-time buyers.
“The planning changes are very positive but further interventions are urgently needed if we’re to increase housebuilding to the required level,” said HBF chief executive Neil Jefferson, pointing to last year’s record low of just 30,000 housing projects receiving planning permission in England.
A government spokesperson defended their progress, stating: “The OBR forecast only factors in some of our reforms. Our Planning and Infrastructure Bill, long-term housing strategy and Affordable Homes Programme will all help reach our 1.5 million target.” However, with construction rates still lagging far behind what’s needed, questions remain about whether Labour’s housing ambitions can become reality.
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