Autumn Budget 2025: Is the government’s 1.5 million new homes target more likely now?

BCIS chief economist Dr David Crosthwaite explores whether the government’s commitment to 1.5 million new homes is likely to gain traction after the Autumn Budget, and considers the structural pressures that continue to shape delivery across England.

As the Chancellor delivered the Autumn Budget, many in the sector will have been wondering whether she would recommit to the government’s pledge to deliver 1.5 million new homes in this Parliament, given the widespread scepticism about its achievability.

While Rachel Reeves did not mention the target explicitly at the despatch box, she invoked the familiar call to ‘get Britain building’ in the opening lines of her speech, and the Budget document itself states clearly: ‘The government is committed to delivering 1.5 million homes in England this Parliament.’

That commitment is, in part, supported by a renewed drive to increase the capacity of the planning system. The government announced an additional £48 million in the Budget to recruit more planners and expand planning capacity in England. This was welcome news for the Royal Town Planning Institute (RTPI), which has warned about an ageing workforce and an exodus of planners leaving the profession in the next three years⁽¹⁾.

The RTPI stressed, however, the importance of long-term investment, noting a 29% reduction in funding for planning policy teams over the last 15 years⁽²⁾.

The latest net additions data, combined with more recent EPC data, estimates that 275,600 net additional homes were delivered between 9 July 2024, when Parliament opened, and 9 November 2025. This means that, while 27% of the parliamentary term has passed, progress towards the homes target stands at 18%.

England needs to add around 822 new homes per day to hit the 1.5 million goal within five years. Of course, each day delivery falls below that rate pushes up the required average for the remaining period. The government has introduced a range of measures intended to stimulate supply, but many of these interventions, much like attempts to expand the construction workforce without allowing wider access to migrant labour, will take years to produce visible results.

Both the pre- and post-Budget landscapes show a sector under strain. This is reflected in recent delays data published by the Building Safety Regulator. Projects held up at gateways 1 and 2 have contributed significantly to the slowdown in housebuilding activity in London, in particular. Low activity levels there have prompted both the Homes for London package of measures and the Support for Housebuilding in London consultation⁽³⁾, which aim to unblock stalled schemes and ease delivery., which aim to unblock stalled schemes and ease delivery.

The Office for Budget Responsibility’s latest forecast⁽⁴⁾, issued alongside the Budget, estimates cumulative net additions between 2024/25 and 2029/30 at 1.49 million, around 10,000 lower than its March forecast. Crucially, this figure relates to the total UK housing stock, not just England.

The latest government data show that England accounted for 83% of dwellings completed in the UK in 3Q2025. On that basis, the figure for England could be closer to 1.2 million, and still assumes a significant ramp up in delivery over the period.

Pressure is also mounting on SME housebuilders, who have become increasingly vocal about the barriers they face in bringing forward new development. The Home Builders Federation argues that, if these barriers were addressed, SME builders could deliver up to an additional 100,000 homes per year. Its latest State of Play: Challenges and Opportunities report⁽⁵⁾ lays bare how small and medium sized builders have been squeezed by a range of factors. Almost all respondents (97%) reported that business taxation and the regulatory environment are barriers to the growth of their business in the next 12 months.

Among greater business costs have been increased employment costs, with rising employers’ National Insurance contributions from April 2025 now combined with further wage increases announced in the Budget. Many firms across construction have reported not only pausing active recruitment to grow their businesses, but also not replacing workers when they leave.

Wider construction workforce data reinforces these concerns. ONS estimates suggest the UK construction workforce has fallen to its lowest level in almost 25 years. There are now more than 280,000 fewer workers than before the pandemic, a fall of around 12%. This shrinking workforce, including a reduced pool of self-employed labour, limits the industry’s ability to mobilise quickly if demand does recover.

A further concern emerging from the sector is the limited visibility of the cumulative cost burden from upcoming regulatory and standards changes. Housebuilders are simultaneously preparing for the Building Safety Levy, transition to the Future Homes and Future Buildings Standards, uplifted energy-efficiency requirements, stricter compliance under the Building Safety Act and the rising cost of meeting biodiversity and planning-related obligations. In a recent BCIS poll, more than one-third (36%) of respondents, primarily cost consultants and surveyors, said the sector is ‘not at all’ getting enough advance visibility to plan for these cost implications, while a further 33% percent said they think the sector receives only ‘a little’.

One positive development in the Budget was the government’s decision to step back ‘for now’ from its proposed changes to the landfill tax system, which would have added another cost pressure for developers. Even so, the wider uncertainty around upcoming obligations continues to make it difficult for housebuilders to forecast viability, sequence workloads and commit to new schemes.

Demand-side conditions are of course also shaping output. Recent data showing historic lows of ready-mixed concrete deliveries and gravel and sand sales are a strong signal that manufacturers of construction materials have had to adjust their own output in line with demand, responding to a cooler market. Brick deliveries, a key indicator of housing activity, remain more than one-quarter down on the same period in pre-pandemic 2019.

Taken together, these indicators suggest that the 1.5 million homes target is no more achievable now than it was before the Budget. The government’s commitments on planning capacity are a step in the right direction, but broader demand side pressures, skill shortages and regulatory bottlenecks continue to hold back delivery.

The next year will be critical as planning reforms and capacity funding start to work through the system. If approval times shorten and stalled schemes in London begin to move, activity could rise from its current lows. Without visible improvement by mid-2026, pressure will intensify for further intervention to meet the government’s ambitions on housing supply.

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Autumn Budget 2025

Further commentary on the Budget announcements:

Autumn Budget 2025: Budget blues mustn’t be allowed to undermine skills momentum

Autumn Budget 2025: Budget brings more costs to construction’s doorstep

Autumn Budget 2025: BCIS welcomes government decision on landfill tax reform

Autumn Budget 2025: a bad day for business?

Autumn Budget 2025: is 2026 shaping up to be infrastructure’s year?

^{(1) RTPI – One in five planners expected to leave the profession within three years, with no clear plan to replace them  – here}

^{(2) RTPI – The RTPI responds to announcements on plan-making reforms  – here}

^{(3) GOV.UK – Support for housebuilding in London– here}

^{(4) GOV.UK – Office for Budget Responsibility – Economic and fiscal outlook – November 2025 – here}

^{(5) HBF – State of Play 2025/26  – here}