Published by Global Banking & Finance Review®
Posted on December 19, 2025
4 min readLast updated: January 20, 2026
Add as preferred source on GoogleBritain's government faces challenges in meeting housing targets due to planning delays, economic uncertainty, and workforce shortages.
By Suban Abdulla and Pasit Kongkunakornkul
LONDON, Dec 19 (Reuters) - Britain's government is struggling to make much headway on one of its main promises to voters - to speed up house-building and thereby give the broader economy a boost.
Prime Minister Keir Starmer's government on Thursday secured final approval for legislation aimed at streamlining the planning system and accelerating infrastructure projects.
But other challenges remain, ranging from delays in the planning process, economic uncertainty and weak demand to land viability and a shortage of skilled workers.
PLANNING APPLICATIONS FOR RESIDENTIAL HOMES
Figures from TerraQuest, which jointly runs a planning portal with the housing ministry, show a rise in the overall number of planning submissions in the third quarter of 2025.
Local authorities in England - excluding London where the figures are reported borough-by-borough - submitted 98,723 planning applications in the July-to-September period, up about 40,000 when compared with the same quarter a year ago.
But TerraQuest Chief Executive Geoff Keal said delivery of homes remains challenging even after permission is secured due to unrealistic land values, higher upfront utility costs, ecological considerations and limited grid capacity.
The government faces a "real risk that ambition outpaces delivery," he said.
PLANNING APPROVALS FOR RESIDENTIAL HOMES
Planning approvals in England have fallen since early 2024, something housing experts attribute to political and economic uncertainty before last year's national election and lingering concern among house-builders about regulations, taxation and delays in getting the government's reforms approved by parliament.
In the 12 months to September, 37,700 decisions were made on residential applications, official data showed, down 13% on a year earlier. Of these, 28,500 were given approval, down 8%.
HOUSEBUILDING
The number of new homes built in England fell in Starmer's first year in power, reflecting the impact of high interest rates, rising building costs and uncertainty about housing targets for local authorities which were scrapped by the previous Conservative government but have now been reinstated.
Analysts say the government is likely to miss its goal for the construction of 1.5 million new properties in total by 2029, when the next election is due.
Completions of new homes fell to 36,160 between April and June, down 19% from the second quarter of 2024 or a fall of 22% from the same period in 2019, before the COVID pandemic.
But the number of new homes in the process of being built rose, offering some encouragement for the government.
Housing starts in England in the three months to June were 15% higher at 31,430 than a year earlier even if they were down by more than a fifth compared with the same period in 2019.
Britain's fiscal watchdog, the Office for Budget Responsibility, expects net additions to the housing stock to fall to 215,000 in 2026 from an average of 260,000 per year in the early 2020s.
Net additions measure the overall change in the number of available homes, including new builds, turning one dwelling into multiple flats, converting non-residential spaces such as office spaces into homes, and demolitions.
The OBR expects annual net additions across the UK to rise sharply to 305,000 before the next national election and reach a five-year total of 1.49 million by 2029.
Housing in Britain is devolved and the government's five-year, 1.5 million-home target is for England only.
Hannah Aldridge, senior research and policy analyst at the Resolution Foundation, a think tank, said the OBR projection means house-building would have to accelerate to its highest levels since the 1970s - around 350,000 homes a year - to hit the government's target.
The Chartered Institute of Housing estimates the government is likely to fall short of the target by around 25%.
AGEING WORKFORCE
Britain's lack of candidates to fill jobs has been aggravated by Brexit and the COVID-19 pandemic. Overall vacant positions are higher than before the pandemic.
Employment in construction hit its lowest level in nearly 25 years in the three months to September, according to official data. The total workforce in the sector fell by 1.2% in the July-to-September period to 2.04 million people, a 12% fall compared with just before the pandemic.
Construction firms in Britain, as in many other countries, must also deal with an ageing workforce. Many skilled employees are approaching retirement age and more than one-third, or around 500,000 workers, are expected to retire by 2035.
(Reporting by Suban Abdulla; Graphics by Pasit Kongkunakornkul; Editing by Hugh Lawson)
Planning approval is the official permission granted by local authorities to proceed with construction or development projects, ensuring they meet regulatory standards.
Housing completions refer to the final stage of the construction process when new homes are finished and ready for occupancy.
Land viability refers to the economic feasibility of developing a piece of land, considering factors like costs, market demand, and regulatory requirements.
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