One year on, how much progress has the Government made on building the UK’s much-needed new homes? Ginetta Vedrickas looks at the situation
One year after the General Election, the progress report from the Home Builders Federation (HBF) warns that, despite a positive start, the delivery of new homes is still falling and is well short of the levels needed to meet the Government’s ambitious target of building 1.5 million new homes
Key areas that are yet to be tackled
The industry has welcomed some of the Government’s planning reforms, but the report finds that broader policy and delivery challenges, particularly on the demand side, are still unresolved and are now seriously constraining the sector’s ability to increase the supply of new homes. HBF’s report, One Year On: Progress Report on Housing Delivery Since the General Election, scores the Government in six key policy areas: national planning policy, the planning process, affordable housing, solutions for nutrient and water neutrality, expanding the workforce, plus other emerging issues impacting the industry. Only one policy area, planning policy, was identified as having achieved significant progress.
Lack of affordable homes
The report warns that supporting the industry to deliver affordable homes must be a major priority for the Government, but it has found little progress. The HBF says that, despite Government pledges in its Spending Review of funding to support building new affordable homes, plus a five-year rent settlement for social housing providers, these pledges will do little in the short term to increase affordable housing.
The report warns that over 100,000 private homes and at least 17,000 affordable homes are stalled due to a lack of registered provider (RP) bids for Section 106, also known as affordable housing. These are properties built by developers under a legal agreement with a local planning authority (LPA), to ensure that a portion of new developments are made available at a reduced price or with other restrictions to help meet local housing needs. Registered providers are organisations registered with the Regulator of Social Housing to own and manage social housing properties. These organisations could be local authorities, social landlords or housing associations. RPs are responsible for providing affordable housing options such as low-cost rental, affordable rent, and low-cost home ownership, for example Shared Ownership homes.
Water neutrality issues hinder building progress
The report also found that around 20,000 potential new homes are currently delayed by water neutrality requirements. Water neutrality rules dictate that any new developments built must not increase overall demand for water in a region. This is achieved by ensuring that any increase in water demand from new construction is offset by reductions in water usage within the existing community. Essentially, it aims to balance the water consumption of new developments with equivalent water savings elsewhere, so the net impact on water resources is zero. The report warns that other schemes are also being held up by wastewater connection issues and electricity grid capacity constraints.
Progress in planning policy
Policy planning is pinpointed as having seen the most progress so far according to the report, which describes the new National Planning Policy Framework (NPPF), the introduction of the grey belt designation, and proposals for strategic planning reform as “all welcome steps”. But it also warns that the planning process has had limited progress. Local planning remains costly, slow and unpredictable, especially for small and medium (SME) housebuilders. Underfunded local authority departments are a major cause of delays, and, while higher fees may help, improved service must follow. The report calls on Government to boost planning department resources, standardise Section 106 agreements, adopt clear timelines, set common infrastructure standards, and back SME builders by releasing more land for small sites. It says that the Planning and Infrastructure Bill is a “welcome step forward”, with new measures like the Nature Restoration Levy offering a pathway to unlock development in affected areas. But it also says that urgent clarity is needed, particularly around unresolved water neutrality rules.
More builders needed
The report also warns that expanding the workforce is necessary to achieve the Government’s ambitious housing targets, a move that could also boost “green” jobs and innovation. The HBF believes that the Government should now prioritise practical Further Education college training, green skills should be properly funded, and clearer plans are needed for consumer protections and faster grid connections to ensure that more environmentally friendly homes can be delivered at scale.
The report offers several suggestions of how the Government can get housebuilding back on track. It suggests a new equity loan scheme to support first time buyers, interim funding to unlock affordable housing delivery through Section 106, more resources for local planning teams, and a more proportionate and coordinated approach to new regulations.
London’s new homes
London faces particular challenges when it comes to building new homes. The Mayor of London’s Affordable Homes Programme (AHP) 2021-26 requires building to start on 17,800 new affordable homes by next year, but new figures show more than 12,000 of these builds are not yet under way. In May, the Government agreed to reduce the Mayor’s targets from a previous range of 23,900 to 27,100 starts, to the current range of between 17,800 to 19,000, with the Greater London Authority (GLA), saying the reduction “responds to the difficult conditions London currently faces”. The recently published annual London Assembly Affordable Housing Monitor finds that in 2023-24, the net addition to London’s affordable housing stock was 7,674, well below the GLA estimate that London needs a net 42,841 affordable homes each year between 2016 and 2041.
By March 2025, the GLA had completed 871 homes under the AHP 2021-26. This means it has a minimum of 16,929 homes to complete by March 2030. The AHP found that 35% of homes started under the previous AHP 2016-23 are still to be completed, with no deadline set for completions. Looking back at figures for 2023-24, the latest year for which figures are available, just 37% of new build homes completed in London were affordable. This was two percentage points lower than the previous year but an increase from 19% in 2016-17. The GLA is on track to exceed its target for at least 60% homes under the AHP 2021-26 to be for social rent. Currently, 84% of starts are for social rent.
The Mayor of London is also on record as having welcomed the biggest funding settlement for housing from the Government as well as key policy changes which he hopes will boost the delivery of social and affordable homes across the capital. London will receive £11.7bn over 10 years – up to 30% of the national total – through the Government’s new Social and Affordable Homes Programme. Sadiq Khan has long argued that tackling London’s housing crisis is critical to realising national growth ambitions, calling for a new funding deal and policy reforms to put the capital on track to deliver the scale of genuinely affordable and social housing that Londoners desperately need
Scotland’s housing picture
Scotland’s housing policy differs to the rest of the UK, as devolved powers enable the Scottish Government to make independent decisions on all aspects of housing. A new report warns that Scotland is in a “state of housing emergency” with the numbers of SME homebuilders having fallen to their lowest level in 20 years.
These latest insights are provided by SME homebuilder members of sector body Homes for Scotland (HFS), who, combined, built more than 2,500 homes across all tenures in 2024, including 1,075 for social rent. Red tape and rising costs are highlighted as key issues, with nearly nine in 10 survey respondents saying Government policies are making it harder for them to build. Planning holdups are pinpointed as being problematic, with 96% of SME builders reporting that slow planning decisions block progress, stopping much-needed new homes from being delivered. Sector leaders are now demanding action if the Scottish Government is serious about combatting the housing emergency. HFS wants planning to be streamlined, reflecting the recent reforms proposed by the UK Government to boost housing delivery in England.
Ginetta Vedrickas
GinettaVedrickashas always had a passion for property. With over ten years of experience working for a local authority housing department, she completed an MA in social policy and housing before training as a journalist at the then London College of Printing. Since then, she has writtenmainly onproperty for most British newspapers including The Independent, Observer, Mail on Sunday, The Times, London Evening Standard and was the editor of Metro’s property section.She’salso written for overseas titles such as AD’s The National and Ireland’s Business Post. Today she freelances for a range of magazines including Showhouse and First Time Buyer.
