The Government has unveiled a £625 million construction skills package to train 60,000 workers, aiming to support an additional £2 billion investment in social and affordable housing.
The move comes as new analysis suggests Labour’s ambitious housebuilding plans have faltered following its first Autumn Budget.
Research by planning consultancy Ceres Property, based on the latest ONS data (January 2025), shows that despite an initial boost in construction output after Labour’s election victory, momentum has since waned.
Total construction output for new homes in 2024 fell by 5.7% compared with 2023, dropping to £43.5 billion. Public sector housebuilding saw the steepest decline, down 7.1%, while private housing output fell by 5.5%.
INITIAL SUCCESS
Labour’s victory last summer initially buoyed the construction sector, with average monthly output rising from £3.56 billion between January and June to £3.74 billion from July to October.
Public housing output grew by 1.2%, while private sector output rose by 5.6%. However, this trend reversed following the Autumn Budget, with average monthly output between November and January falling by 7.5%. Public sector output dropped by 9.9%, while private housebuilding declined by 7.1%.
DAMPENED MOMENTUM
Iain Halls, partner at Ceres Property, says: “Labour set out an ambitious target of 1.5 million new homes by 2030. While initial optimism led to increased construction activity, the Autumn Budget has dampened momentum.
“The budget was widely seen as negative for the construction sector. While there were some commitments to infrastructure investment, Labour failed to address key challenges such as rising material costs and supply chain disruptions. The increase in National Insurance Contributions has also hindered recruitment, exacerbating existing labour shortages.”
Halls also points to long-standing regulatory bottlenecks, particularly those stemming from post-Grenfell safety reforms, which have delayed new developments over seven storeys.
He adds: “If Labour is to meet its housebuilding target, it must do more to stimulate the industry. Increasing the supply of skilled construction workers is a step in the right direction, but further action is needed to tackle deeper structural challenges.”
