Labour is on course to miss its flagship housing target by almost a decade, according to new analysis by West One Loans.

Despite a marked increase in new housing starts since taking office in July 2024, the government appears to be falling significantly behind its promise to deliver 1.5 million new homes within five years.

Based on the current pace of new-build activity, West One Loans estimates that it will take Labour close to 12 years to meet its target – overshooting its original timetable by more than eight years.

The party’s manifesto commitment was framed in terms of net additions to England’s housing supply – a measure that includes not only new-builds but also homes created through conversions and changes of use.

However, West One’s research, which draws on historic data, notes that nearly 90% of net additions come from new-build development. This implies that Labour would need to deliver approximately 1.35 million new-build homes to meet its 1.5 million total.

Since assuming power, Labour has overseen 86,000 new housing starts across England in three quarters – a notable increase on the 68,080 recorded in the preceding three quarters. This equates to an average of 28,667 new-build starts per quarter, or 114,667 per year. At that rate, reaching the new-build portion of the housing target would take nearly 12 years, well beyond the current parliamentary term.

NO SURPRISES

Thomas Cantor, co-head of short-term finance at West One Loans, said the findings were unlikely to surprise many within the industry.

“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,” he said.

“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.

“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.”