The misjudgement over Stamp Duty which led to Angela Rayner’s resignation as Deputy Prime Minister and Housing Secretary, may be deeply embarrassing for her (and her party) but it will likely save her from the embarrassment of failing to achieve the government’s target of delivering 1.5 million new homes by 2029.
In an interview on Sunday Morning with Trevor Phillips, back in December 2024, the then DPM vehemently argued that this was her target, and she would be accountable for it. That interview might best be remembered for her inability to respond to Phillips’s assertion – backed up by quoting the government’s own data – that five out of every seven new homes would be needed just to keep pace with immigration.
If the 1.5 million new homes target applied from the date of the last election it works out roughly at 300,000 new homes each year. According to the National House Building Council, 124,144 new homes were completed in 2024 (a 7 per cent decrease on the previous year). The Office for National Statistics has reported that 38,780 new homes were built in the first quarter of 2025, a decrease of 6 per cent compared to the first quarter of the previous year.
Now, I’m no mathematical genius but it strikes me that as every month goes by with the numbers being far less than required for the five-year target, then that proportionate target must increase month-by-month. So, if we continue to build houses at the same rate for the rest of 2025 then we are likely to build only around half the annual number required to meet the government’s target. So instead of needing to build 300,000 a year between 2026 and 2029, the likelihood (on present data) is that it will be something closer to 350,000. We haven’t built that many new homes since the 1960s, at which time large numbers of homes were built by local authorities and now they build none.
If anything, every current indicator suggests that we will build fewer houses over the coming years. There are many such reasons but uncertainty in the housing market is a major factor, and this is caused by speculation about the future of the economy and the very tax system that has brought Ms Rayner down. The current system is bad enough (no one should have to pay £70,000 stamp duty on buying a medium-sized family home in London) but the speculation about increasing tax on property transactions, capital gains and inheritance in a way that will affect ordinary families (especially in London and the South-East) will simply put a brake on people moving.
Another factor is the increasing regulation through a little-known body, the Building Safety Regulator, set up within the Health & Safety Executive after the Grenfell tragedy. This has led to huge delays in the approval process for large-scale developments. Projects that might normally have received building control approvals in a few weeks are taking months to be given the green light at what is called Gateway 2 (a mandatory checkpoint requiring building control approval before construction begins). As of 1 August, over 150 applications covering almost 35,000 residential units were stuck in the pipeline. The HSE blames the industry for poor applications, and the industry blames the bureaucracy (not helped by a lack of capacity in building control expertise). These delays must inevitably require cost cutbacks, and one developer has intimated that this is likely to mean less affordable housing on their estates.
In an about-turn the government is taking the regulatory responsibility away from the HSE and creating a new executive agency under the MHCLG which will be led by two former senior fire brigade personnel: Charlie Pugsley as chief executive and Andy Roe as non-executive chair. It remains to be seen whether this will unblock the current delays.
Another likely drawback comes with Rayner’s resignation. She has a lot in common with another former Labour DPM, the late John Prescott. Prescott and Rayner share a reputation as political ‘bruisers’ . When Prescott called a summit in 1999 to address increased fatalities in the construction industry, the CEOs of every major builder lined up to be berated and health and safety in the industry improved dramatically. Rayner had declared in no uncertain terms that she owned the government’s housing target, and I have no doubt that she would have got off the inflatable dinghy to berate the housebuilders in a similar way. Who will do it now?
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