Developers Warn Labour Will Miss Housebuilding Targets
The boss of one of Britain’s largest developers has warned that Labour is on course to miss its ambitious housing targets. Berkeley Group chief executive Rob Perrins said the industry is being held back by excessive taxes and growing regulatory burdens.
Asked whether the government would meet its goal of building 1.5 million homes during this Parliament, Perrins was blunt, replying simply: “No.”
Construction Output Shrinks Sharply
New figures from the Office for National Statistics revealed that construction output fell by 1.3 per cent in November alone. Over the three months to November, the sector contracted by 1.1 per cent, marking its weakest performance since March 2023.
Economists say the data confirms construction is now experiencing its most prolonged slump since the 2008 financial crisis.
Mortgage Demand Falls as Buyers Hold Back
The slowdown is being compounded by weaker demand from buyers. A recent poll by the Bank of England showed mortgage demand fell in the final quarter of last year at the sharpest pace since late 2023.
Lenders expect demand to continue falling over the next three years, a trend that poses a serious challenge to Labour’s ‘build, baby, build’ housing strategy.
Builders Cite Tax and Regulation Pressures
Perrins said the sector is being “overtaxed” and weighed down by new rules, including the building safety levy introduced to fund cladding and defect repairs. He warned that continued regulatory changes risk further stalling development.
“You need to stop bringing in new regulation,” he said, adding that policy uncertainty surrounding Rachel Reeves’s Budget had damaged confidence across the housing market last year.
Taylor Wimpey and Rivals Flag Weak Demand
Housebuilder Taylor Wimpey echoed the concerns, warning that demand remained muted, particularly among first-time buyers. Chief executive Jennie Daly said weak sales in the second half of last year had spilled over into 2026.
Rising build costs are also squeezing margins, with the company expecting profits to be lower this year than in 2025.
Sector-Wide Struggles Continue
Rivals Vistry and Persimmon have also reported subdued market conditions. While Persimmon exceeded build expectations last year, it warned there would be no meaningful improvement in conditions in the near term.
Shares across the sector have fallen sharply, reflecting growing investor concern about the outlook for UK housebuilding.
Feel-Good Factor’ Needed to Revive Housing Market
Despite the gloomy outlook, Perrins said there were tentative signs of recovery following an “unusually good” start to the year. However, he stressed that restoring confidence is essential if Labour is to revive the sector.
“What is fundamentally important is that we get the feel-good factor back,” he said a task that analysts say will require clearer policy signals, lower regulatory burdens and renewed confidence among buyers and lenders alike.
