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May's 0.6% construction fall means "the 1.5m homes pledge is looking like a pipe dream"

ended 11. July 2025

LABOUR's target of building 1.5m new homes in the current administration will not be achieved, property experts have said following the 0.6% contraction in the construction sector in May.

Scott Gallacher, Director at Rowley Turton, said "the 1.5m homes pledge is looking like a pipe dream", while Stephen Perkins, Managing Director at Yellow Brick Mortgages, said the target simply will not be met in this political term: "Despite all the talk from this government about getting Britain building again, the reality is that the construction sector itself is slowly being demolished.

“So far, there are no credible plans on which to lay the foundations of growth within the housebuilding sector. The 1.5 million new homes target certainly won’t be achieved in this political term.”

Adam Stiles, Managing Director at Helix Financial Partners, said the goal is now looking increasingly “laughable”: “This latest construction data, showing the sector contracting by 0.6%, contradicts all the rhetoric surrounding housebuilding coming from the government. The goal of 1.5m was always laughable, and it's even more so now.”

Babek Ismayil, Founder at homebuying platform, OneDome, said the Government now has an Everest to climb: “The goal was always optimistic and that, based on this latest construction data, is what it's proving to be. The Government now has an Everest to climb if it wants to meet its 1.5m homes target.”

Harry Goodliffe, Director at HTG Mortgages, said “this drop in construction output is a palpable reality check for Labour’s 1.5 million homes pledge. You can’t just throw out a big number and hope the industry magically delivers, especially when nothing’s been done to fix the planning system or support smaller developers. If Labour were serious, we’d already be seeing bold moves, not business as usual".

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, said the magical target was a long way off: "The target is ambitious and it has to be, but the longer it's left the harder it gets. It's like chasing a run rate in cricket — a few poor overs and the number required jumps up.

“What would be good to see is a sustained increase in housing starts but they're currently below pre-pandemic levels. The magical target seems a long way off at this point.”

7 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Despite all the talk from this government about getting Britain building again, the reality is that the construction sector itself is slowly being demolished. So far, there are no credible plans on which to lay the foundations of growth within the housebuilding sector. The 1.5 million new homes target certainly won’t be achieved in this political term.
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Adam Stiles
Managing Director at Helix Financial Partners
This latest construction data, showing the sector contracting by 0.6%, contradicts all the rhetoric surrounding housebuilding coming from the government. The goal of 1.5m was always laughable, and it's even more so now.
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Harry Goodliffe
Director at HTG Mortgages
This drop in construction output is a palpable reality check for Labour’s 1.5 million homes pledge. You can’t just throw out a big number and hope the industry magically delivers, especially when nothing’s been done to fix the planning system or support smaller developers. If Labour were serious, we’d already be seeing bold moves, not business as usual.
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Tony Redondo
Founder at Cosmos Currency Exchange
The rhetoric was grandiose. To build 1.5M new homes in a parliamentary term for the first time since the late 1960s was a phenomenal target to set. In practice, the 0.6% fall in UK construction output in May further complicates Labour’s new homes pledge. Challenges include labour shortages, rising material costs and planning delays with first quarter 2025 approvals 33% below target. Add in the effects of the £40bn tax rises from last year’s Budget that have resulted in the construction sector having 17% of all insolvencies in the UK, the highest of any industry, and the target is all but doomed to failure. The next 12–18 months are critical.
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Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
The target is ambitious and it has to be, but the longer it's left the harder it gets. It's like chasing a run rate in cricket — a few poor overs and the number required jumps up. What would be good to see is a sustained increase in housing starts but they're currently below pre-pandemic levels. The magical target seems a long way off at this point.
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Scott Gallacher
Director at Rowley Turton
The 1.5m homes pledge is looking like a pipe dream. There’s been no real planning reform, and housebuilders dodge scrutiny, settling alleged illegal practices for just £100m. While £100m might seem big, let’s not forget Persimmon’s former boss Jeff Fairburn once pocketed a £75m bonus. We had hoped Labour would hold people to account and clean up the system, but it seems those with deep pockets can buy themselves out of trouble.
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Babek Ismayil
CEO at homebuying platform OneDome
The goal was always optimistic and that, based on this latest construction data, is what it's proving to be. The Government now has an Everest to climb if it wants to meet its 1.5m homes target.