OBR expects Labour to fall 500,000 homes short of pledge

The Office for Budget Responsibility (OBR) forecasts that Labour will build around one million homes over the next parliament, falling 500,000 short of its manifesto pledge to add 1.5 million. The shortfall matters because the pledge was central to the Government’s plans to expand housing supply, while fewer homes could mean more competition for rental properties and make it harder to buy.

The OBR lowered its estimates for new homes to 220,000 a year in 2027 and 2028, before forecasting 260,000 in 2031; it also expects 190,000 fewer cumulative additions to the housing stock than in its March forecast. It cited weak demand, rising material costs, high interest rates, regulation and wider pressures in construction. In the Budget, the Government announced extra support for social and affordable housing, including £1.5 billion more funding, and a £4.7 billion equity loan scheme for first-time buyers.