The property agent blames the shortfall on a mixture of falling planning consents, subdued demand for new homes and a shortage of trained builders. 

Savills directors of residential research Emily Williams and Chris Buckle say: “Falling planning consents in the last three years have reduced the pipeline of new homes which can be delivered in the near term, while recent planning reform will take time to have an impact on completions.  

“In addition, subdued demand for new homes will remain a barrier to growth – housebuilders will only build where they see demand for the finished homes.  

They add: “Even if policy removes this demand barrier through measures such as a buyer support scheme or a large increase in grant funding for affordable housing, delivery will be constrained by the speed at which the housebuilding sector can expand its workforce and supply chains.” 

The agent’s prediction is 42% short of the government’s 1.5 million homes target, and is also lower than the Office for Budget Responsibility’s 1.3 million target in its March report. Over the last five years, the UK built around one million new homes.

The OBR said that building 1.3 million new homes would lift the UK’s total housing stock by around 0.5% by 2029-30.

The spending watchdog added that the government’s proposed planning reforms would add 0.2% to the country’s growth, “thanks to a boost in the productivity of residential construction and the increased flow of housing services from the higher stock of houses”.

Labour is shepherding two major pieces of legislation through parliament – the Renter’s Rights and the Planning and Infrastructure Bills – which will ease housebuilding restrictions, increase new towns and end no-fault evictions. 

In March, Chancellor Rachel Reeves also set out a £600m plan to train up to 60,000 bricklayers, electricians and carpenters over the next four years.

However, Savills says that in its best-case scenario, the government’s measures will boost housebuilding “to 1.2 million completions over five years at absolute capacity, based on past precedents for expansion”.

New home completions fell in the year to March 2024 by 6.5% to 198,600 homes, according to housing department data.  

Savills says: “A drop in completions was widely anticipated, given that the Help to Buy scheme, a significant demand boost for new homes, had ended in March 2023.” 

The agency estimates that 180,700 new homes were completed in 2024/25, based on energy performance certificate figures.  

Savills’ Williams and Buckle add: “A continued fall in full planning consents in 2024/25 suggests the decline in completions will necessarily continue for up to two years — the rough length of time between a change in consents volumes and a subsequent change in completions.”