The government is on course to fall 500,000 homes short of its 1.5 million housing target, according to new research from the Chartered Institute of Housing (CIH) and the University of Glasgow.
The findings highlight how rising construction costs and difficult market conditions are limiting private developers’ ability to increase housing supply. The warning follows Housing Secretary Angela Rayner’s admission that meeting the government’s pledge before the next election remains a challenge.
Housing delivery could fall 500,000 short
Research suggests that around one million homes could be completed by the target deadline, leaving a shortfall of approximately 500,000. This represents a more pessimistic outlook than the UK Housing Review published in March, which forecast a deficit of around 25%.
The social housing sector is expected to provide approximately 70,000 affordable homes each year. However, the expense of improving existing properties is putting additional pressure on housing providers, potentially limiting the funds available for new developments.
Providers must also contend with requirements to improve energy efficiency, upgrade heat networks and bring properties in line with the Decent Homes Standard.
Private developers face their own obstacles, including elevated building costs and uncertainty over whether new projects will remain financially viable. These pressures continue to make it harder to deliver the number of homes needed to meet the government’s ambition.
CIH chief executive Gavin Smart said the latest figures showed that current building rates were not keeping pace with the scale of the housing challenge. He stressed the need for greater certainty and investment for councils, housing associations and private developers, highlighting the importance of social and affordable housing in increasing supply.
He also pointed to the upcoming Autumn Budget as an opportunity for the government to support its housing commitments with funding, including bringing forward investment announced in the Spending Review.
Government admits target will be difficult to achieve
Angela Rayner previously acknowledged the difficulties facing the government during an appearance on Sunday with Laura Kuenssberg. She cited several obstacles, including the conflict in Iran and increasing construction costs, as factors making the 1.5 million homes pledge harder to deliver before the next election.
Speaking to the BBC, Ms Rayner admitted that the chances of reaching the target were slim, although she maintained that she would continue working towards it. She also acknowledged that the commitment had always been ambitious, particularly given the challenges affecting the housing market.
Ms Rayner highlighted Prime Minister Andy Burnham’s commitment to expanding council housebuilding, supported by funding for social and affordable housing.
She also pointed to a 15% increase in housing starts during the previous year, arguing that the improvement was beginning to have an impact.
However, the latest research suggests that significantly more progress will be needed if the government is to come close to delivering its 1.5 million homes pledge.
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