Build Baby Build: Has Labour’s Housing Plan Delivered?

December 15, 2025

On 12 December 2024, the Labour government unveiled its ambitious roadmap to “get Britain building again,” pledging to deliver 1.5 million new homes before the next general election. To achieve this, the UK would need to construct 370,000 homes annually, a target that raised eyebrows from the outset.

What Was Promised?

Under the revised National Planning Policy Framework (NPPF), Labour introduced several key measures aimed at accelerating housing delivery:

  1. £14.8m Development Grant
    Eligible local planning authorities were invited to apply for a share of this fund to support new projects.
  1. “Golden Rules” for Land Use
    Developers must prioritise brownfield sites, but the government signalled a shift by favouring development on low quality green belt land dubbed “grey belt” to ease planning restrictions.
  1. Affordable Housing Boost
    A £39bn fund was allocated to expand social and affordable housing, with a focus on helping first time buyers. This is part of the government’s 10-year Affordable Homes Programme (to see more: https://www.gov.uk/guidance/social-and-affordable-homes-programme-sahp-2026-to-2036).
  1. Mandatory Housing Targets
    Local authorities were given strict targets, with the threat of government intervention if they failed to deliver.
Reality Check: Are We on Track?

Despite the optimism, the numbers tell a different story. According to the Home Builders Federation (HBF), since the June 2024 election, only 275,000 homes have been built, far short of the 400,000 needed to stay on track. Government data paints an even bleaker picture:

  • Net additional housing remains around 200,000 per year, with signs of stagnation.
  • A BBC report revealed that new home completions have fallen to 139,000 annually, the lowest level in nine years and the weakest since the pandemic.

In London, the situation is critical. June 2025 saw just 4,000 new homes delivered, compared to a target of 81,000. Emergency consultations are underway, with proposals including a temporary reduction in affordable housing requirements from 35% to 20%.

Why Are Targets Slipping?

Several factors have combined to slow progress:

  • Rising Construction Costs
    The Building Cost Information Service (BCIS) reports price increases of 2–5% for key materials like steel, cement, bricks, and timber since 2023. Overall, building costs have surged by 13% since 2022.
  • Financing Challenges
    Higher interest rates for development finance and soaring mortgage costs have reduced affordability for first time buyers, shrinking demand.
  • Regulatory Pressures
    Post-Grenfell reforms under the Building Safety Act 2022 have added compliance costs estimated at £21,500 per home for a two-bed flat in London alongside the 4% development tax (which impacts companies and groups of companies with profits over £25m per annum) and the building safety levy.
How can Herrington Carmichael help?

With Labour’s ambitious targets and rising costs, developers face unprecedented challenges. At Herrington Carmichael, we provide cost effective legal solutions to help you navigate land acquisition, planning, and plot disposals, including:

  • Option Agreements
  • Conditional & Unconditional Contracts
  • Promotion Agreements
  • Overage Agreements
  • Collateral Warranties
  • JCT Contracts
  • Section 106 Agreements & Unilateral Undertakings

Contact Herrington Carmichael today to discuss how we can help you deliver successful, cost-effective legal solutions.

Claire McSorley
<script>
document.addEventListener('DOMContentLoaded', function () {
  const deptEl = document.getElementById('acf-author-department');
  const department = deptEl?.dataset?.department;

  if (typeof gtag === 'function' && department) {
    gtag('set', { author_department: department });
  }
});


  window.dataLayer = window.dataLayer || [];
  const dept = document.getElementById("author-department")?.textContent?.trim();
  if (dept) {
    window.dataLayer.push({
      event: "authorDataReady",
      author_department: dept
    });
  }

</script>
View profileContact Us

This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

Latest Legal Insights