Labour to miss 1.5m homes target, house builders warn OBR
Housebuilders have warned in a letter to the budget watchdog that the government will not meet its target of building 1.5 million homes by the end of the decade; It’s a fresh blow to Rachel Reeves ahead of what’s expected to be a tough budget in November.
The Home Builders Federation (HBF), the representative body for the housebuilding industry in England and Wales, said in a letter to the Office for Budget Responsibility (OBR) that its forecasts for economic growth from housebuilding were overly optimistic.
Neil Jefferson, the organisation’s chief executive, said the OBR’s figures could only be achieved if ministers gave more help to first-time buyers and cut planned taxes on new homes to stimulate demand, leaving many areas “uninhabitable”.
He said: “The OBR’s forecasts for housing supply were ambitious. Figures can only be achieved in the right policy environment.”
Special alert seen by TimesThis development is likely to hurt the watchdog’s chances of raising its forecast for economic growth from construction. In the worst-case scenario, it could even lead to a downgrade.
In its manifesto, Labor pledged to start work on 1.5 million new homes during Parliament to extend homeownership to more Britons. But homebuilders have repeatedly raised the alarm, arguing that the commitment is too ambitious.
Chris Curtis MP, chair of Labour’s Growth Group, said his party was “at risk of not achieving our ambitions because reform is too slow”.
“The House of Lords is delaying the legislation and the government is not strong enough to stand up to the opposition,” he said Times.
“So we now need to go further by reforming building safety regulation, fixing the broken approach to nature regulation and accelerating the New Towns programme.”
However, Minister Alex Norris stressed that the government “made that commitment and we will deliver on it”.
The Home Secretary told LBC: “I’m sorry to see this story. The truth is we inherited a broken housebuilding system. The lack of targets meant the market stalled, which of course takes time to take off.”
“Whether it’s changes to the planning framework, whether it’s the Planning and Infrastructure Bill that’s going through parliament, we’re making changes to make construction better in these communities across this country.”
He added: “We were clear with the British public from the beginning that this was not going to be an even distribution from year one because the baseline we had built was so weak.”
It came as the Chancellor insisted the UK did not have to “accept” poor economic forecasts, despite reports that it faces bad financial news ahead of next month’s Budget.
Don’t write GuardMs Reeves acknowledged that the Office for Budget Responsibility’s (OBR) productivity forecasts can make reading difficult.
He also argued that austerity, Brexit and the pandemic had left “deep scars” on the UK economy.
But he said he was “committed not only to accepting the predictions but also to challenging them” and that “we will not re-judge the past or allow past mistakes to determine our future.”
His comments come as he prepares to present the budget next month, which is expected to include further tax rises, as he tries to plug a multi-billion pound gap in his plans.
A government spokesman said: “We will leave no stone unturned to build the 1.5 million homes this country desperately needs and reignite the dream of home ownership.
“Alongside the major planning changes we have already introduced to enable developers to build homes and our huge £39bn investment in social and affordable housing, we are going further and faster to accelerate reform and usher in the greatest era of housebuilding in our country’s history.”
