The Labour government is projected to miss its flagship target of building 1.5 million new homes by 2029, with new analysis forecasting completions will fall short by almost half.
Property consultancy Savills estimates that only 840,000 homes will be delivered over the next five years, as falling planning approvals, subdued demand, and a lack of buyer support schemes undermine the sector’s momentum. The firm warned that meeting the target would require “very significant demand support” — including a new version of Help to Buy.
Savills’ analysis follows the release of stark planning data from the Home Builders Federation (HBF), which shows just 39,170 homes were granted planning permission in the first quarter of 2025 — the lowest quarterly figure in 13 years. In comparison, the government needs to deliver an average of 300,000 new homes annually to meet its target. Currently, completions are tracking closer to 167,000 per year.
Dan Hill, a senior researcher at Savills, said the housing market was being held back by both a collapse in planning approvals and weakening demand from first-time buyers and housing associations. “Developers will only build what they can sell,” he added, warning that without fresh demand stimulus, output would continue to stagnate.
Help to Buy, the government-backed equity loan scheme which ended in March 2023, was instrumental in supporting buyer demand, especially among young and first-time homeowners. Its absence has left many without support for the first time in over six decades, a void that housebuilders now want to see filled.
Several major developers, including the chief executives of Barratt Redrow and Persimmon, have publicly urged the government to reintroduce a buyer support scheme, particularly as housebuilding activity continues to decline.
Neil Jefferson, chief executive of the HBF, described the outlook as bleak. “All indicators for housing supply continue to stagnate or go backwards,” he said, blaming an increasingly hostile policy environment, tax burdens introduced post-Grenfell, and planning gridlock.
Concerns are also mounting that this week’s spending review could lead to cuts in housing budgets, further straining delivery capacity. A coalition of industry groups including Landsec, Peabody and BusinessLDN has written to housing minister Matthew Pennycook warning that social housing providers are already struggling to maintain existing stock, let alone build new homes.
“The lack of new supply is not only putting a massive strain on local public finances,” the letter said, “but is also acting as a barrier to recruitment and retention for employers.”
Labour has said that its 1.5 million homes target remains in place, but acknowledged it is “a stretching goal”. Officials insist that planning reforms and a boost to affordable housing investment will drive long-term delivery.
In a statement, the Department for Levelling Up, Housing and Communities said: “Our seismic reforms will help drive UK housebuilding to its highest level in over 40 years, and we are delivering the biggest boost to social and affordable housing in a generation alongside supporting first-time buyers.”
But with planning consents plummeting and completions forecast to decline further, industry observers warn that the gap between ambition and delivery is only widening — and that without targeted demand support, Labour’s housing promise may prove as elusive as it is ambitious.
