Despite government commitments to prioritise housebuilding, new analysis from the Centre for Policy Studies suggests there has been limited progress towards meeting housing targets.
Housing policy featured prominently in Parliament in 2025, with “planning reform” mentioned 520 times, a record high. However, construction data shows a contrasting trend.
In 2024/25, every region in England recorded fewer housing starts than in the previous financial year, according to a new data hub published by the Centre for Policy Studies. The decline was most pronounced in London, where just 4,170 new homes began construction, a 72% decrease compared with the previous year.
London has completed more than 10,000 homes annually in every year since 1946. However, consultancy Molior forecasts that completions will fall to around 4,550 homes per year in both 2027 and 2028, based on current levels of housing starts. The Centre for Policy Studies says this would represent the lowest level of housebuilding in the capital for more than 80 years.
The slowdown in London is evident across all tenures. Local authorities began construction on 90 homes last year, down 95% year on year. Housing association starts fell by 78% over the same period.
Nationally, progress towards the government’s target of delivering 1.5 million homes during this Parliament remains limited. The target equates to 300,000 homes per year. In the government’s first year in office, 140,860 homes were completed and 115,770 homes were started, representing 47% and 39% of the annual target respectively.
Policy changes to date have been limited. While emergency measures for London were announced in the autumn, reforms to the Building Safety Regulator have been modest, and no changes have been made to second staircase requirements for taller buildings, which developers say can delay or prevent construction.
Ahead of the parliamentary recess, the government published a draft National Planning Policy Framework proposing to encourage housing development around transport hubs and within towns. The Centre for Policy Studies argues that recent construction trends underline the need for effective planning reform.
Ben Hopkinson, head of housing and infrastructure at CPS, said: “Labour came into government saying all the right things about housebuilding. From Keir Starmer down, ministers claimed to understand the importance of solving our housing crisis in order to boost growth and living standards.
“Yet in reality, numbers of new housing starts have plummeted. London especially is facing the most difficult housebuilding challenge since the end of World War Two.
“The government has stood by the damaging second staircase rules and rewarded the head of the Building Safety Regulator with a peerage, despite the body actively preventing construction from taking place. Changes to the National Planning Policy Framework are welcome but there is every chance the government will fold to pressure from environmental charities and campaign groups to water them down. They failed to deliver in 2025 but we must hope 2026 shows improved resolve.”
Read the orginal article: https://propertyindustryeye.com/london-housing-shortage-at-worst-level-since-the-second-world-war-report-warns/?utm_source=rss&utm_medium=rss&utm_campaign=london-housing-shortage-at-worst-level-since-the-second-world-war-report-warns
