Government’s progress towards 1.5 million new homes

New figures showing the increase in England’s housing supply since Labour came to power indicate the government still has major inroads to make if it is to even come close to its 1.5 million new homes target during this Parliament⁽¹⁾.

According to seasonally adjusted building control data, the number of dwellings where building work has started on site was 33,960 in the first quarter of 2026 – an 18% increase on the same quarter in the previous year. Completions in the same period totalled 37,170, a 3% increase year on year.

For the financial year 2025-26 as a whole, total starts reached 130,170 – a 15% increase on the previous year’s 112,880, which was the weakest in recent years. Completions for 2025-26 totalled 143,110, down from 152,040 in 2024-25 and the lowest level since 2015-16.

Dr David Crosthwaite, chief economist at BCIS, said: ‘The increase in starts over the past year is a more encouraging signal than we have seen for some time, and the year-on-year improvement in both starts and completions in the first quarter of 2026 is welcome. But the figures need to be interpreted with some caution.

‘The higher number of starts in the final quarter of 2025 and the first quarter of 2026 is in part due to the Building Safety Regulator reporting significantly elevated starts following reforms announced in June 2025 – with previously delayed schemes now progressing through the system. That is not the same as a broad-based increase in underlying housing delivery, and it is important to distinguish between pent-up activity coming through and a sustained improvement in output.

‘The government’s 1.5 million new homes target was always going to be extremely difficult to meet. Based on EPC registrations data, an estimated 392,400 net additional homes have been delivered in England since Parliament opened on 9 July 2024. That represents roughly two-thirds of the pace required to hit the target – and to close the gap from here, the sector would need to deliver around 361,000 homes a year for the remaining period, well above anything achieved in modern times.

‘The picture is complicated further by the political uncertainty now facing the sector. A Labour leadership contest running through the summer introduces exactly the kind of pause in decision-making that construction can ill afford. Investors hold back, developers reassess viability, and procurement decisions get deferred – all before any new government announces a change, or not, in policy.

‘Looking at the underlying cost pressures, input price inflation remains elevated and the Bank of England has held rates. The conditions that were expected to support a recovery in housing delivery – lower financing costs and easing materials prices – have not materialised as the industry had hoped. Until they do, sustaining the higher rate of starts seen in 2025-26 and converting that into completions will remain very challenging.’

Estimated net additional dwellings in England (rounded to nearest 100)

^{Source: MHCLG}

House building starts and completions, England, financial year

^{Source: MHCLG}

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⁽¹⁾ GOV.UK – Live tables on housing supply: indicators of new supply – here