Housebuilding in the North of England requires the biggest uplift to meet the Government’s national target of 370,000 new homes per year, but past delivery figures indicate that Labour’s ambitious targets may be unrealistic, according to the latest forecast by West One Loans.
The specialist lender analysed Local Housing Need figures based on planned reforms to the National Planning Policy Framework (NPPF), which aims to reshape planning laws and streamline housing delivery. Under the proposed changes, Local Housing Need across England is set to rise by 21.4%.
The Government’s planning framework, which sets housing supply expectations for local authorities, includes a national housebuilding target of just over 370,000 homes annually. It also proposes revising intervention criteria to limit Nimbyism from blocking new developments.
According to West One Loans, the North East faces the most significant increase in housing requirements. Previous estimates required 6,123 homes per year, but under the new method, this figure rises to 10,976—a 79.2% increase.
Other regions facing substantial increases include the North West (61.3%), South West (41.8%), South East (37.9%), and Yorkshire and the Humber (33.5%).
However, historical data suggests these targets are overly ambitious. The Government has consistently struggled to meet its housing delivery goals, despite counting net additional dwellings—which includes change of use, conversions, and demolitions—rather than just newly built homes.
In the Autumn Budget of 2017, the Government set a target of 300,000 new homes per year by the mid-2020s. The closest it came was in 2007/08, when 223,534 net additional dwellings were delivered. The highest recent figure was in 2021/22, with 234,462 homes, but numbers have since declined to 221,071 in 2023/24.
With Labour now aiming for 370,000 new homes annually, past figures suggest achieving this target will be a significant challenge.
Guy Murray, co-head of short-term finance at West One Loans, said: “Our new Labour government has been quick out of the blocks with respect to new housing delivery and their introduction of grey belt land classification is certainly one of the more positive steps we’ve seen in recent times.
“However, whilst admirable, their target of 370,000 new homes per year seems ambitious at best, particularly when you consider the failure of the previous government to come anywhere close to its target of 300,000 new homes per year.
“The key to boosting housing delivery is developer incentivisation and this can take many forms from tax breaks, grants, credits or rebates, or via improvements to help streamline the process, such as easing zoning regulations.
“Of course, the biggest incentive is a buoyant market and we’re yet to see the current government make any real statement with respect to stimulating buyer demand levels, in fact, they’ve done quite the opposite by failing to extend current stamp duty relief thresholds beyond the end of March.”
