Slow homebuilding output means the government is unlikely to meet its targets, an industry expert has warned.
Market data and subdued financial results from housebuilder Bellway have led to concerns that 1.5 million new homes are unlikely to be built by the next election.
Dr David Crosthwaite, chief economist at the Building Cost Information Service (BCIS) told Construction News: “We don’t expect the sector to deliver anywhere near the 1,000 homes per day required for the government to get close to its self-imposed target.
“The deputy prime minister has still not said who is going to build 370,000 new homes per year. The last time that volume of new homes was built was in 1970 when almost 380,000 homes were completed in the UK.”
He added the only way the government’s target would be met was if councils returned to homebuilding but that was “unlikely given the current state of the public finances”.
His comments came after data intelligence provider Glenigan revealed overall residential project starts fell 17 per cent between July and September – 24 per cent lower than the third quarter (Q3) of last year.
Private housing accounted for 57 per cent of total starts, with a total value of £5.9m, down 22 per cent compared with 2023. Planning approvals fell 20 per cent in Q3 compared with the previous three months, Glenigan said on Tuesday (15 October) in its latest monthly construction review.
Homebuilder Bellway also flagged concerns after publishing preliminary results on the same day that showed 7,654 completions for 2024. The firm forecast completions of 8,500 in 2025 – still below the 10,954 homes it completed in 2023.
The firm welcomed the government’s plans to reform the planning system but only “as a positive motivation for housebuilders”. Bellway added the reforms would increase new housing “in time”, although it did not predict a specific timeframe.
Bellway finance director Keith Adey said homebuilders were going in the right direction but questioned whether the industry “would be able to step up so quickly to meet that [1.5 million] target”.
His comments came after a survey by multidisciplinary consultancy Pick Everard and planning and development consultancy Lichfields found that the industry’s appetite to invest had not risen following July’s general election.
Bellway and Glenigan predicted further cuts in interest rates would improve build numbers from spring 2025, but both said it would take longer for output to return to pre-downturn levels.
Glenigan economic director Allan Wilen said: “As economic conditions stabilise and political certainty improves, we’ll likely see clients and contractors push forward with planning bids as confidence in the market is restored.”
Crosthwaite said activity would pick up next year as “pent-up demand and improving affordability feed through to house price growth”. He predicted this “should encourage developers to start building again”.
