The Construction Products Association has sent a letter to chancellor Rachel Reeves, warning that without action, the 1.5m new homes target will not be fulfilled
The CPA letter outlines several actions that would support the housing sector to avoid missing housing targets.
The letter comes as the Office for Budget Responsibility downgrades their forecast, leaving the construction industry with “no chance” of meeting the target.
Action is needed in the Autumn Budget
The letter drives home the point that action must be taken within the Autumn Budget to avoid missing the target, as was highlighted in the Association’s earlier Autumn Forecast.
Further, the letter outlines several actions that can be taken to avoid the issue, including supporting first-time buyers (as stated in a letter from the Home Builders Federation), funding building safety regulators and enforcement bodies, supporting repair, maintenance and improvement, improving infrastructure delivery, and increasing investment.
Professor Noble Francis, CPA economics director, said: “Construction has already lost more than 11,000 construction firms since the start of 2023, and given the current low levels of house building and home improvement, we expect construction insolvencies to accelerate in 2026. A new positive, time-limited stimulus for house building demand is urgently needed from the government – particularly for first-time buyers – before insolvencies further damage skills and capacity throughout the construction supply chain, including architects, builders’ merchants and product manufacturers, as well as house builders and specialist contractors. Without these firms and their critical skills and capacity, any sustained recovery in house building will be more difficult, slower, and more expensive over the course of this parliament.”
The letter can be read in full here.
London housebuilding has already collapsed
Earlier this month, a package of emergency housebuilding measures were announced for England’s Capital. The policies include slashing targets for affordable housing from 40% to 20%, and other measures that target viability through removing design guidance and density constraints.
Housing secretary, Steve Reed, said: “Getting spades in the ground in London is crucial if we want to see the biggest increase in social and affordable housing and meet our target of delivering 1.5 million homes in our Plan for Change.
“I have worked closely with the Mayor of London to give the capital the shot-in-the-arm it needs to ensure more Londoners have an affordable home of their own.”
Mayor of London, Sadiq Khan, said: “Affordable housing has always been a top priority for me as Mayor. We have started more new council homes in London than at any time since the 1970s and, prior to the pandemic, completed more new homes in London than any time since the 1930s. But there’s now a perfect storm facing housebuilding in London due to a combination of high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit. All of this means we are now in the midst of the most difficult period for housebuilding since the global financial crash.
“Urgent action is required, which is why I’ve been working with the government on this package of bold measures. I grew up in a council house, so I know the importance of social and affordable homes. I’m not willing to stand by while the supply of affordable housing for Londoners dries up. With these significant new powers and the initial £322 million of funding from the government – plus the short-term emergency action to get more investment flowing into affordable housing – I’m confident that we can kickstart housebuilding and deliver more of the affordable homes Londoners badly need.
“I will always do everything I can to accelerate the delivery of genuinely affordable homes as we continue to build a better, fairer London for everyone.”
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