Just over 300,000 homes were added to the housing stock in the first 18 months of the new parliament, nearly a third short of the pace needed to meet Labour’s manifesto target of 1.5 million homes by the end of this parliament. The government faces a myriad of obstacles, including soaring material costs, labor shortages, and planning bottlenecks.
Labor Shortages: A Connectivity Issue, Not a Skills Crisis
At South and City College in Birmingham, dozens of young people in hi-vis vests and hard hats are building mini-walls and plastering half-formed rooms. Some weave through stacks of bricks with wheelbarrows, while others use spirit levels to ensure walls are straight. These walls will soon be demolished for the next class. This is the new generation of Britain’s construction workers, eager to help build the 1.5 million homes the government promises.
However, many in the sector believe the target is impossible. Over 140,000 job vacancies existed in construction in 2025, and a third of workers are set to retire by 2035. Staff at the college argue it is not a skills crisis but an opportunities crisis. Courses in brickwork, plumbing, electrical, and carpentry are busier than ever, with the college expanding its Longbridge campus to meet demand.
More than 62,500 adults enrolled in construction qualifications in England last academic year, the fastest-growing field in adult education. Yet only 24,500 started apprenticeships, far below what is needed. Rebecca Waterfield, executive director at the college, said: “We could fill most of our eight campuses with demand in construction alone. But I only had three brick apprentices start this year. Employers are being shortsighted, not taking on young people due to costs and time.”
The government plans to train 40,000 new builders, but faculty head Andy Thompson noted: “They’ll hit that easily. The hard part is getting them into jobs.” Waterfield added: “It’s not a skills shortage. It’s a connectivity issue. If every construction employer in Birmingham took one student for experience, they’d have their next workforce.”
Cost of Materials: Rising Prices and Supply Disruptions
At Emerys builders merchants in Stoke-on-Trent, managing director James Hipkins pointed to insulation boards: “Suppliers are closing order books due to rising fuel costs. That holds up housebuilding because companies can’t get what they need.” Prices of UK-produced bricks are 80% higher than a decade ago, and insulating materials, metal screws, and precast concrete have risen about 50% since 2021. Geopolitical instability, energy costs, and the shift to low-carbon materials have driven up expenses.
John Newcomb, CEO of the Builders Merchants Federation, said: “We’re way adrift of housebuilding targets. We’ll likely see a 5-10% price increase in materials due to the Middle East situation.” The sector invested £1.4 billion to increase capacity, but the anticipated boom hasn’t materialized. In the last year, 24 BMF members went into insolvency. Hipkins said: “This is the first time in 40 years we’ve posted an annual loss. It’s worse than after 2008.”
Affordability: A Collapse in Housebuilding
At Woodberry Down in north London, Berkeley Homes is demolishing flats as part of a 15-year regeneration project. Only 3,248 new private homes began construction in London in the first nine months of 2025, less than 5% of the government’s 88,000 per year target. Rob Perrins, executive chair of Berkeley Group, said: “Housebuilding is in a worse position than 2010. Costs are up 50%, but sales prices haven’t risen.”
Berkeley Group recently stopped buying new land and hiring due to geopolitical volatility and weak demand. Housing Secretary Steve Reed cut affordable housing targets in London from 35% to 20% to boost building rates. Perrins defended the move: “Do you want 20% of something or 35% of nothing?” However, one in three buyers now cancels reservations, up from 15% a year ago.
Less than one in five homes in England are affordable. Social rent rose 8% in Labour’s first year. Local authorities sold nearly 7,000 social rent homes through right-to-buy schemes. Dr Jonathan Webb from Sheffield Hallam University said: “The government relies on large private housebuilders, who need profits. There’s a misalignment between government goals and builder interests.”
Planning Reform: Progress but Not Enough
Labour has introduced major planning reforms: reinstated mandatory housing targets, a “grey belt” to bypass some green belt restrictions, and reduced local planning committee powers. A new policy may create a presumption of approval for housing near train stations. Robert Boughton, CEO of Thakeham, called it “generational change.”
But planning applications are still insufficient. In February, applications were a third short of the number needed to meet the target. Boughton noted slow highways approvals and water connections: “It’s like sludge in the system.” Steve Turner of the Home Builders Federation warned: “You risk wasting planning changes if you don’t address other factors. Many sites are not viable due to costs and lack of buyer confidence.”
