England’s Housing Woes Continue as Construction Numbers Sink

Despite promises to tackle Britain’s housing crisis, the government has been struggling to ramp up housing construction. Between July and December 2024, about 107,000 new homes were built in England, a 10% plunge from the same period in 2023, according to BBC Verify.

Every region registered a decline, with the North West hit hardest at 27%, followed by Yorkshire and The Humber at 15%. The West Midlands and the North East also posted slight declines.

The figures are based on Energy Performance Certificates (EPCs) issued for newly completed homes. Experts warn the slowdown could persist unless impactful reforms take effect.

What Has Kept Construction Slow

The government’s ambitious housing plan calls for 1.5 million new homes before the next election, translating to an annual target of 370,000 homes. However, achieving that goal depends on overcoming deep-rooted issues in England’s planning system.

Industry experts point to the previous government’s decision in 2023 to remove mandatory housing targets as a big factor behind the current decline.

The current government has reinstated mandatory targets but the effects won’t be immediate. It takes nearly four years for small-scale developments of up to 100 homes to progress from application to completion. That means tangible results from Labour’s reforms are unlikely to be seen before 2026 or 2027.

The Role of Government Investment

Although the government has promised to “get Britain building again,” some experts argue that policy changes alone won’t be enough. There has been no money forthcoming to subsidise delivery by putting homes into the social or private rented sector, which is something previous governments did during market downturns.

Yet the government insists it is taking action. It has pointed to increased investment, including a £5 billion housing fund and an extra £500 million for the Affordable Homes Programme.

Policy Reforms v. Market Realities

Meanwhile, home builders acknowledge that the government’s planning reforms are a step in the right direction but warn that additional measures will be necessary to stimulate supply.

One formidable challenge is the availability of affordable land and the financial viability of new projects. High construction costs, sky-high interest rates and an uncertain economic environment continue to dampen developer confidence.

Conclusion

Though the government’s housing ambitions are bold, turning them into reality will require more than just policy changes. The government must address planning delays, boost direct investment and create incentives for private developers to build at scale.

The current downturn in new housing supply is a hurdle, though not an insurmountable one. If the government’s policies deliver as intended, a big increase in housebuilding could be on the horizon by the latter half of the decade. Until then, however, England’s housing crisis is likely to remain a persistent problem.