Labour is on track to miss its flagship housing pledge by nearly a decade despite an uptick in the number of new homes breaking ground since the party took office, new analysis from West One Loans reveals.
In its 2024 General Election manifesto, Labour committed to delivering 1.5 million new homes in England over its first five years in power.
That translates to an annual average of 370,000 net additions – a figure widely viewed at the time as overly ambitious given market conditions and planning bottlenecks.
Almost a year into its term, Labour has overseen a total of 86,000 housing starts across England in the three quarters since Q3 2024. This represents a notable improvement on the 68,080 starts recorded in the previous three quarters (Q4 2023 to Q2 2024), suggesting some early momentum.
FALLING SHORT
However, West One Loans’ analysis shows that current delivery levels still fall far short of the pace needed to hit the target on time.
Crucially, the party’s pledge is based on net additions to the housing stock – a figure that includes not just new builds, but also homes created through conversions and changes of use.
Historically, new-build properties account for 89.8% of total net additions, meaning Labour will need to deliver around 1.35 million new homes to stay on track.
So far, the party has achieved an average of 28,667 new-build starts per quarter – or 114,667 per year. If that rate continues, it would take Labour approximately 11.8 years to reach the 1.35 million mark.
That’s more than double the five-year timeframe initially promised, and with one year already gone, it leaves the government eight years behind schedule.
STILL EARLY DAYS
Thomas Cantor, Co-Head of Short-Term Finance at West One Loans, says: “The Labour Government was quick to hang its hat on an ambitious target with respect to housing delivery and, with previous government’s having consistently fallen short, this was understandably met with a great degree of scepticism.
“Of course, it is still early days and Labour may well be in the process of laying the initial groundwork required to eventually pave the way for an explosion in new home delivery.
“But whilst it’s possible that they need time to overhaul planning rules, cut red tape, and prepare and incentivise the nation’s housebuilders to increase output, it’s already looking as though the task of delivering what was promised is running away from them.
NO SURPRISE
And he adds: This will come as little surprise to the industry who have been consistently calling for further market stimulation via government intervention of monetary policy.
“We simply haven’t seen enough done in this respect and given the lack of movement with respect to interest rates of late, the worry is that we aren’t unlocking the full potential of development activity at a time when it’s needed most.”
