Are Labour's housebuilding targets in ruins?

Is this one of those 'I told you so' moments? I really hope not, but the claim by the Home Builders Federation (HBF) - the representative body of the home building industry in England and Wales - that the Labour government will fail to meet its target of building 1.5m homes by the end of the decade, is in line with doubts I have been expressing since August 2024.

Back then, I said 'If Labour are serious about providing homes where they are most needed then they will need to provide significant amounts of public subsidy and ensure that local councils and housing associations are sufficiently resourced to build the social housing that is required. They will also need to invest in infrastructure. This target cannot be met on the cheap.'

I repeated that view in October 2024, and in December, I suggested that there a feeling is developing that the government has bitten off more than it can chew with an overly ambitious target.

The Independent reports that the warning by housebuilders was conveyed in a letter to the budget watchdog and is a fresh blow to Rachel Reeves ahead of what is expected to be a difficult budget in November. The HBF say that the government's forecasts for economic growth from house building are too optimistic:

The organisation’s chief executive, Neil Jefferson, said the OBR’s numbers would only be achievable if ministers gave more help to first-time buyers to stimulate demand and slashed planned taxes on new homes, which he said were making many sites “unviable”.

The private warning, seen by The Times, is likely to harm prospects for the watchdog upgrading its forecast for economic growth from construction. In a worst case scenario, it could even result in a downgrade.

In its manifesto, Labour pledged to begin work on 1.5 million new homes over the course of the Parliament, to expand homeownership to more Britons. But house builders have repeatedly sounded the alarm over the pledge, arguing it is too ambitious.

MP Chris Curtis, chair of the Labour Growth Group, said his party is “at risk of not hitting our targets because reform has been too slow”.

“The House of Lords has been holding up legislation, and the government hasn’t been strong enough in standing up to opposition,” he told The Times.

“That’s why we now need to go further, by reforming the building safety regulator, fixing the broken approach to nature regulation, and swiftly getting on with the New Towns programme.”

My hunch is that they will make significant progress, but the target is too high. We won't know of course until the end of the decade.