Sir Keir Starmer's flagship pledge to build 1.5 million new homes is now considered to have 'close to zero' chance of being met, according to a damning analysis of official construction data. The research reveals a severe nationwide slump in housebuilding activity during Labour's first year in government.
A Nationwide Construction Collapse
The bleak assessment comes from the Centre for Policy Studies (CPS) think tank, which compiled the figures. Its report shows that across England, just 115,700 homes began construction in the 2024/25 financial year. This represents a mere 39% of the 300,000 annual starts needed to hit the Government's target of 1.5 million by the end of the Parliament in July 2029.
Every English region recorded a fall in housing starts, but the slowdown is most acute in the capital. In London, only 4,170 new homes started construction in 2024/25, marking a catastrophic 72% decline from the previous year. The consultancy Molior predicts this will result in as few as 4,550 homes being finished in both 2027 and 2028—a figure not seen since the post-Second World War era.
London's Unprecedented Slump
The CPS analysis indicates the collapse in London is across all types of housing. Starts by local authorities fell by a staggering 95%, with just 90 homes begun last year. Construction initiated by housing associations in the capital similarly dropped by 78%.
This has led to fierce criticism from the opposition. James Cleverly, the Shadow Secretary of State for Housing, Communities and Local Government, stated: 'Labour are all talk and no action. In Labour-run London, housebuilding has totally collapsed and Sadiq Khan is plumbing depths of failure not seen since the Second World War.'
The campaign group Britain Remade has extrapolated from the poor figures, predicting the Government will likely see fewer than 750,000 homes built this Parliament—half of its target and fewer than were constructed during the last Conservative Parliament.
Planning Reforms: A Glimmer of Hope?
In response, the Government insists it remains committed to its target, arguing that a surge in construction will follow once its recently announced planning reforms take effect. Just before the Christmas recess, ministers released a new draft National Planning Policy Framework.
Key proposals include a 'default yes' for developments within a 15-minute walk of busy railway stations, provided they deliver at least 20 homes per acre. Council planning committees would also lose the right to decide on smaller projects, with decisions handed to expert planners. Some biodiversity rules are also set to be relaxed for smaller sites.
The CPS report argues the dramatic slowdown shows why such bold reforms are 'needed urgently'. It warns, however, that the Government has so far made only 'minor changes' and must be prepared to 'not back down' against opposition from environmental charities and campaign groups.
Ben Hopkinson, head of housing at the CPS, said: 'Labour came into government saying all the right things about housebuilding... Yet in reality, numbers of new housing starts have plummeted.' He urged for improved resolve in 2026.
The housing shortfall is further complicated by immigration figures. A Conservative Party study noted that net migration stood at 204,000 in the year to June, with new immigrants potentially requiring over 36% of the new homes completed. They warned this proportion could rise to 50% by 2030, increasing demand and house prices.
