Government set to miss 1.5 million homes target by 500,000

The government will fail to meet its 1.5 million homes target by a third, according to new research.

Research from the Chartered Institute of Housing (CIH) and the University of Glasgow warns that high construction costs continue to hinder private developers’ efforts to meet the government’s housing target.

The news comes as housing secretary Angela Rayner has admitted there is only a “slim chance” the government will meet its target.

500,000 fewer homes than planned

According to the data, around one million homes could be delivered by the target date, approximately 500,000 fewer than planned. This marks a worsening outlook since the full UK Housing Review was published in March, when researchers predicted a shortfall of around 25%.

The data estimates that the social housing sector could deliver around 70,000 affordable homes annually. However, the cost of upgrading existing homes is placing further pressure on providers’ ability to build new ones.

Key challenges include meeting new energy efficiency targets, upgrading heat networks and ensuring homes meet the Decent Homes Standard.

Meanwhile, private developers continue to face challenging market conditions, with high construction costs and concerns over development viability creating further barriers to boosting housing supply.

CIH chief executive Gavin Smart said: “These findings show that, while the government’s ambition is welcome, current delivery is not yet matching the scale of the challenge. If we are to build the homes the country needs, councils, housing associations and developers must have the certainty and investment necessary to increase supply. Social and affordable housing will be critical to achieving that goal.

“The upcoming Autumn Budget is an important opportunity for the government to back its housing ambition with the investment needed to boost delivery, bringing forward the funding announced at the Spending Review.”

Always a stretched target

As previously reported by Property118, speaking on Sunday with Laura Kuenssberg, Angela Rayner blamed “headwinds”, including the war in Iran and rising construction costs, for making it increasingly difficult to deliver the pledge before the next election.

Ms Rayner told the BBC: “It’s a slim chance, but I’m definitely not giving up. It was always a stretched target and with the situation in the Middle East and building costs having gone up at the moment in the housing market.”

She added that Prime Minister Andy Burnham had pledged a council house-building revolution, with funding for social and affordable housing.

She added that home starts were up by 15% last year, and claimed this was making a difference.