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.
In short
- Labour is forecast to miss its 1.5 million homes pledge by 500,000.
- The OBR points to weak demand, higher costs and construction pressures.
- The Budget adds funding for social housing and first-time buyer loans.
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The case for
The pledge was a reasonable response to a long-running shortage: adding homes can ease competition for rentals and make buying more accessible, while supporting social and affordable housing can help people whom the market does not serve well. The OBR’s forecast suggests the Government’s current policies may not deliver the scale of supply promised, so further action could be needed to address barriers such as planning, finance and construction costs.
The case against
A 1.5 million-home target is ambitious, and the OBR points to weak demand, high interest rates, rising material costs and wider construction pressures that governments cannot quickly control. The new funding for affordable housing and the first-time buyer loan scheme may support supply and access, while avoiding a push to meet a numerical target at the expense of financial sustainability or build quality.
Explained simply
The Office for Budget Responsibility is an independent body that assesses the economic and public finance effects of government plans. Labour’s manifesto promised to add 1.5 million homes over the next parliament, using changes to planning and support for housebuilding.
The number of homes built depends on more than government targets: developers also weigh demand, borrowing costs, materials and the rules they must follow. Social and affordable housing is intended for people who may struggle to buy or rent at market prices, while equity loans can help some first-time buyers meet the cost of a purchase.
Housing supply matters to renters and would-be buyers because it affects how many homes are available. It is one factor among several that shape rents and house prices, alongside demand, incomes and borrowing costs.
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Originally published by Daily Mail as “Labour to miss housing target by half a million homes”.