Angela Rayner on track to deliver fewer homes than the Tories

Labour is on track to deliver fewer homes this parliament than the Conservatives in a setback for Angela Rayner, the Housing Secretary . A total of 1.14 million homes are expected to be added to Britain’s housing stock in the five years of this parliament, according to fresh forecasts from the Office for Budget Responsibility (OBR). That is fewer than the nearly 1.18 million built in the 2019-24 parliament, which was cut short by an early election.

The period of Conservative rule was also blighted by the pandemic lockdowns that shut down building sites. The forecast from the OBR is a blow for Ms Rayner and Labour, which has made boosting housebuilding a key priority. In its 2024 manifesto, Labour criticised the Conservatives for failing to build enough homes and promised to “get Britain building again”. The party vowed to deliver 1.5 million new homes over this parliament. Industry has long warned that the Government is well off track to meet this goal but ministers have continued to defend it.

Ms Rayner described it as a “really difficult stretch target” in July but insisted the goal was not being dropped. In September, she admitted there was only a “slim chance” of building 1.5 million new homes but said: “I’m definitely not giving it up.” The Housing Secretary has sought to blame the Iran war for blowing the Government off course , saying rising interest rates have weighed on the housing market. However, Katie Lam, the shadow housing secretary, blamed the Government for the backwards step on home construction.

Ms Lam said: “Labour have no excuse. They’ve utterly failed to bring their pledge to fruition because they’ve layered taxes and red tape on to the industry, making building less and less viable.” Steve Turner, the executive director of the Home Builders Federation, said Labour’s reforms since taking office were welcome but failed to address “the massive increase over the past 20 years in the level of taxation and policies, all with a cost, levied on to housebuilding by successive governments”.

These included requirements to build more affordable homes as well as environmental schemes and taxes, he said, adding that “demand is suppressed by a lack of affordable mortgage lending”. The average five-year fixed mortgage currently available comes with an interest rate of almost 5.9pc, according to Moneyfacts, up from 4.9pc before the war in Iran began at the end of February. John Healey, the Chancellor, has instructed Andrew Bailey, the Governor of the Bank of England, to seek more ways to help first-time buyers.

In a letter sent last week to set out the mandate of the Bank’s financial policy committee, Mr Healey called for the Bank to “target improving access to home ownership without prejudicing financial stability”, urging officials to look at rules around high loan-to-value mortgages. Such mortgages are often taken by those buyers making their first step on to the housing ladder, requiring an initial loan which is relatively large compared to their earnings.

In forecasts produced alongside the Budget, the OBR cut its projection for house building during the coming five years by 190,000. The watchdog said it still believed Labour’s reforms would “have a positive impact on housebuilding” but said the downgrade reflected “wider pressures in the construction sector because of weak demand, rising material costs and the impact of other regulatory changes”. A spokesman for the Ministry of Housing, Communities and Local Government said: “We’re getting this country building again and with new housing starts up 20pc compared to this time last year, and a 298pc increase in London alone, our bold planning reforms are working.

“We’ve always been clear that delivering 1.5 million homes was a stretch target and we recognise the challenges the sector is facing with construction costs and macro-economic headwinds.”