Labour’s 1.5 million home target is drifting out of reach

It’s early days, but it isn’t looking good

It’s been obvious for a while that there’s been no construction boom since Labour came to power last year. Nor since the reforms to the National Planning Policy Framework (NPPF) in December. These reforms were meant to speed up the system, tilt decision-making in favour of development, and make it harder for councils to block new housing.

Labour does have a decent excuse: applying for and getting planning permission takes time. At least it does today: in the 1930s blocks of flats in London could expect to win planning approval in just three weeks from submission. Similar buildings today require 1,250 page planning applications and can take years to approve. Still, today’s housebuilding numbers largely reflect decisions taken under the previous government.

A fairer way to judge whether the current Government’s policies are working is to look at planning applications, an early indicator of future building. Data provided by Barbour ABI let us to analyse the trend. Unfortunately, there’s no good news here. If anything, it’s getting worse.

There’s been no meaningful uptick since Labour’s election in July 2024 or since the NPPF reforms in mid-December. Comparing January–June over the past three years:

To deliver 1.5 million homes over a Parliament (5 years) means building 25,000 homes per month. Every month of shortfall means more building later is needed. The required run rate will creep up. So what does the planning data tell us?

Even if we optimistically assume:

• 100% of planning permissions are granted, and

• 100% of those lead to a house being built

Labour would still be nearly 50,000 homes short of their target for the first half of the year and on track to be over 480,000 short over the course of the parliament.

But those assumptions are wildly optimistic. Realistically:

• Around 90% of applications are approved.¹

• Around 70% of approved applications become actual homes.²

Combining these means you’d need roughly 40,000 applications a month (39,683 precisely) to deliver 25,000 homes per month. Labour hasn’t hit the 25,000 per month mark since taking office, and is nowhere near the more realistic target.

The right No houses in the right places

The amount of housing is important but as Kirstie and Phil will tell you so is location, location, location. Housing is expensive everywhere in England but the crisis is clearly more acute in London and the South East.

A one bed in London is more expensive than a three bed in any other part of the UK. The result? Londoners earn 14% more than the national average, but after housing costs Londoners only take home 1% more than people around the rest of the UK. Many Londoners respond by economising on space: floor space per person for renters in the capital has fallen to just 25 square metres. The average Manhattanite gets 36 square metres.

Looking at the 25 highest-need areas, according to the government’s own formula, only Redbridge has hit its first-half 2025 target. Many are far behind:

• Kensington & Chelsea: 0 approvals.

• Islington: 0 approvals.

• Camden – the PM’s borough): 1.5% of target approvals.

Applications aren’t pouring in either. The combined target for these areas is 5,283 per month. They are miles off the pace. Applying the same realistic build assumptions as above, they’ would actually need 6,799 applications per month.³

Camden’s new draft “local plan”, the blueprint for what gets built and where, calls for 1,038 homes a year. The government target? 3,137.

Camden’s excuse: the London Plan hasn’t been updated since the new targets came in, so they’re sticking to the old numbers. The likely aim? Run down the clock. If they can keep planning inspectors at bay until a new London Plan arrives next year, they have to rewrite the local plan by which point the Parliament will be nearly over.

Why can they get away with it? Because the government’s main punishment for ‘blockers’ is the “presumption in favour of sustainable development” for councils failing to meet 70% of their target. This has little bite in dense inner-city boroughs where it cannot force them to densify. In leafy suburbs with lots of green belt, it matters. In Camden? Not so much.

It’s Not Over Yet

All this gloom comes with a big caveat: we’re just over a year into the Parliament. Developers and housing associations may still be adjusting to the NPPF changes. A wave of applications could yet arrive. Labour’s planning bill is still in the Lords though there is certainly no reason to be watering it down.

But the lag between permission and completion, anywhere from 6 months to 6 years, means the clock is already ticking. If Labour wants to get anywhere near 1.5 million homes, it needs to move faster, not slower.

We worked on this analysis with ITV News’s Economics Editor Joel Hills. You can watch his excellent report on it here: https://x.com/i/status/1955700028854399398

1. The figure moves in the range 80-90%.

2. Applicants can go bust, developers sometimes apply for two planning permissions at the same site after modifications leading to double counting of planning applications, and planning does not always mean all legal barriers have been crossed, so developers can fall at another legal hurdle.

3. Includes an adjustment to account for the fact government have given themselves some room for councils to miss their target by setting the cumulative housing target for councils at 370,000.