1.5m Homes Target: Ambition or Illusion?
The Government’s pledge to deliver 1.5 million new homes by the end of this Parliament has again made headlines – and not for the right reasons…
The Home Builders Federation (HBF) has written to the Office for Budget Responsibility (OBR), with a warning that the government is going to miss its target of building 1.5 million homes in England by 2030.
According to the HBF, the issues holding the market back are rising costs and the lack of a government support scheme (the Help to Buy scheme ended in 2022). Other barriers include new taxes and levies (including the landfill tax), and the building safety levy, which is in the pipeline.
While Housing Secretary Steve Reed insists the Government “stands by its commitment” and will be judged on delivery, it’s becoming increasingly difficult to see how such a goal can realistically be achieved within the timeframe.
NPPF Changes
To be fair, recent changes to the National Planning Policy Framework (NPPF) in December 2024 as we covered in a previous blog, have improved the environment for obtaining planning permission. The re-introduction of the requirement for local planning authorities to demonstrate a five-year housing land supply (after being reduced to four years back in December 2023) and the introduction of the ‘grey belt’ have both been broadly welcomed by developers and planning professionals.
However, as Apex Planning Consultants’ Paul Smith notes: ‘’these changes will take time to flow through the system’’. Even once planning permission is granted, developers face further delays thanks to reserved matters applications, discharging planning conditions, and negotiating Section 106 agreements. Each of these steps can add months, if not years, to a construction start date.
S106 Issues
One of the most frustrating barriers highlighted in recent weeks is the growing problem of unsold affordable homes secured through S106 obligations. According to Placemaking Resource, housing associations, already stretched by government-imposed rent caps, are struggling to take on new stock. The result is a backlog of unoccupied properties – a senseless waste in the midst of a housing crisis.
This issue shows just how fragile the housing delivery system is: even when planning permissions are in place, the chain of delivery can still collapse due to market and policy pressures.
Construction Industry Crisis
Even if the planning system were to move faster, the construction industry itself is facing its own crisis. According to pbc today the latest report from Begbies Traynor warns of rising insolvencies across the construction sector. Many contractors are struggling with increased costs, tight margins, and reduced access to finance.
Brexit’s lingering effects continue to have an effect, too – particularly when it comes to the availability of skilled labour – as many experienced tradespeople have returned to the EU.
Meanwhile, the cost of materials remains high, further eroding viability on marginal schemes.
Paul Smith is blunt about the situation: “The 1.5 million homes target is a joke. It’s just not feasible in this Parliament.” While the NPPF reforms are a step in the right direction, they won’t deliver results quickly enough.
The Secretary of State’s confidence might make for good political soundbites, but the reality tells a different story.
The truth is that the housing crisis cannot be solved through targets alone. It needs time, infrastructure, skilled labour, and a financially stable construction sector – all of which are currently under significant strain.
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