"During the last decade, the flow of construction workers into the market has dwindled considerably – and once the flow has been reduced to a trickle, it takes more than mere confident proclamations to turn the tap on and restore it"
- Lawrence Turner - Boyer
Last year's headlines painted a somewhat bleak picture for the housebuilding industry. Targets looked set to be missed, completion rates were falling, and even Prime Minister Keir Starmer admitted the goal was "a little too ambitious."
But this year, the mood has shifted slightly. The government now insists it will hit its 2029 housebuilding target ahead of the next election, and Deputy Prime Minister Angela Rayner has made Labour's position clear – there are "no excuses" for failing to deliver the 1.5 million new homes promised in the manifesto.
There are minor signs of optimism from within the industry, too. A recent survey by Shawbrook found that three in five developers believe achieving the government's 1.5 million homes target will be "easy." However, as the lender confirmed, doubt remains. Concerns persist within the sector – and not without reason.
With just four years remaining, several challenges must be tackled for the sector to stay on track and meet the target.
Archaeological constraints
Tackling the target from a heritage angle, Mitchell Pollington, Director (Historic Environment) at Lanpro, shares his insights:
"The proposed delivery of 1.5 million homes over the course of this Parliament could pose significant challenges to the archaeology profession, which often plays a key role in the planning process for major residential schemes."
Although the number of archaeologists employed in the UK has increased from a low point 10 years ago, there are still issues over the profession's capability to serve numerous large-scale projects simultaneously. At the same time, the capacity of local authority archaeologists to agree and monitor archaeological schemes of work is also stretched, often within poorly resourced teams.
Pollington warns that overly rigid archaeological requirements – especially when not backed by evidence – could further delay planning approvals and drive up developers' upfront costs, putting smaller projects at risk. He continues:
"It is essential for the archaeological profession to continue to attract new staff into the industry, supported by better-resourced and more pragmatic approaches from local planning authorities, to help facilitate the government's targets."
Planning challenges
Of course, an increase in building comes with an increase in planning challenges. As Lawrence Turner, Director at Boyer, explains:
"With the number of homes permitted by local authorities at the lowest level in over a decade, Keir Starmer will, as he has said, face an 'almighty challenge' in delivering housebuilding targets."
"During the last decade, the flow of construction workers into the market has dwindled considerably – and once the flow has been reduced to a trickle, it takes more than mere confident proclamations to turn the tap on and restore it."
The industry, Turner argues, is constrained by the planning system itself. He explains:
"The sector only has as many workers as work demands, and until recently, the capacity of the construction industry has been restrained by the planning system, artificially constraining the supply of new homes. Building up an additional workforce will take time to train and recruit."
Even if the government is committed, Turner questions how local authorities will respond when controversial planning applications emerge – particularly on the edges of towns and cities, where opposition tends to be strongest. He adds:
"Local politics is just – if not more – important than national politics in delivering targets."
"In the construction and planning sector, we know what needs to be done to deliver more housing, but as we're seeing with current debates over new renewable energy schemes, it's hard to sell that story to the wider public."
There's also the case of controversial planning applications in areas where opposition is rife. Here, Turner believes:
"It is plausible that the government will need to intervene and call in applications, favouring high-profile schemes to underscore the principle that housing needs must prevail over local opposition." He goes on to say:
"My concern is that this shift away from appeasing NIMBYs (a stark contrast to the approach of the previous government) could prompt local politicians to reconsider their stance on development."
"Before the issue of resourcing construction comes into play, changing the mindset of some local authorities from protecting the status quo to positively embracing growth and investment is an important first step."
Workforce and supply chain concerns
The widely discussed skills shortage remains a major concern and has significant potential to hinder progress toward targets, as Tim Foreman, Managing Director of Land and New Homes at Leaders Romans Group (LRG), warns:
"Like many in the housebuilding sector, I am concerned that the government's well-meaning housebuilding targets will be compromised by an absence of construction workers, trades and craftspeople."
While demand is there, labour and material shortages threaten progress, as Foreman explains:
"There is certainly an appetite among developers to increase the number of homes they build, and the recently announced planning reforms should support this. However, I still have grave concerns about labour and materials shortages."
"We also need to ensure that an increase in quantity does not denote a decrease in quality. While the housebuilding industry heaved a collective sigh of relief when 'beauty' was removed from the NPPF, design standards must be retained."
Foreman also calls for more substantial support for SME housebuilders, who are at risk of being squeezed out. He observes:
"Overdemand for materials risks smaller housebuilders missing out on vital construction products and, as such, threatens their existence – ironically, when they are needed most."
While the government has doubled the ENABLE Build scheme to £2 billion, Foreman argues that support must continue throughout the build process, not just at the start.
The role of buyers in meeting targets
Boosting supply is only half the battle. Without buyers, the chain breaks down.
"From my perspective – the sales end – it's encouraging to think that with more housebuilding, the market will offer more choice and, with more chance of finding the perfect home, the 'want to move' market segment (as opposed to the 'need to move') will be more inspired to buy," says Foreman.
Yet financial challenges remain a major barrier.
"High inflation and diminishing affordability have put a strain on buyers' ability to move," he explains.
"Furthermore, impacted additionally by a new, lower Stamp Duty threshold, first-time buyers will experience greater difficulties in accessing the housing market. The HBF has called for targeted government interventions, which are yet to be responded to."
Without demand to sustain growth, Foreman warns that any productivity gains will be in vain.
The Road Ahead
Labour’s 1.5 million homes target is one that, on paper, appears achievable but, in reality, faces significant roadblocks. While optimism is creeping back into the industry, deep-seated challenges remain. Planning constraints, workforce shortages, and supply chain pressures all pose serious threats to delivery. Without streamlined planning approvals, a stronger labour pipeline, and sustained government intervention, the industry risks falling short once again.
Ultimately, the success of this housing drive will depend not just on policy but on the ability to translate commitments into action, turning political promises into built homes. Whether the sector will break ground or hit a brick wall remains to be seen.
