OBR cuts UK housebuilding forecast, with output falling to 219,000 by 2027-28

Right · 2The Office for Budget Responsibility (OBR) cut its housebuilding forecast in its analysis of the Budget on Wednesday 28 October. 1 2 Right · 1City A.M. reports the OBR expects housing delivery of 229,000 this year, 221,000 the following year and 219,000 in 2027-28. It had previously expected 252,000 this year. 1 Right · 1The Daily Mail gives slightly different rounded figures, from 230,000 in 2026 to 220,000 in the following two years, rising to 260,000 in 2031. It says the OBR expects 190,000 fewer cumulative additions than in its March forecast. 2

Right · 2The OBR said it had not changed its view that the 2024 planning reforms will help housebuilding. It said the downgrade was instead "driven by wider pressures in the construction sector because of weak demand, rising material costs and the impact of other regulatory changes". 1 2 Right · 1According to City A.M., the OBR named the building safety levy, new biodiversity rules and higher corporation tax among government measures that slowed delivery. It said they had "increased the cost, complexity, and timescales associated with residential development". City A.M. also says the Iran war and the resulting higher mortgage rates hurt demand. 1 Right · 2Labour's manifesto promised 1.5 million new homes this Parliament. The Daily Mail says the OBR's figures imply a miss of about half a million homes. City A.M. says housing secretary Angela Rayner has all but abandoned the target, admitting it was always a "stretch" goal. 2 1

Right · 1Shadow housing secretary Katie Lam said Labour had "failed abysmally" and blamed its "taxes and red tape". She said the Conservatives would cut net zero red tape on homes and scrap stamp duty. 2 Right · 1Steve Turner of the Home Builders Federation said the OBR's earlier projections were "far too ambitious". He pointed to weak demand from mortgage unavailability and to tax and policy costs that make many sites unviable. Vistry chief executive Adam Daniels welcomed support for first-time buyers but warned that delivery is at risk unless viability is addressed. 1 Right · 1The Daily Mail says that in the Budget Chancellor John Healey extended cheaper borrowing for councils and made land sold to social housing providers VAT-free. He also removed biodiversity requirements for more brownfield sites and added £1.5bn for social and affordable housing. He launched a £4.7bn "Your First Home" equity loan scheme and said he was drawing the line on constant changes to building regulations except where critical for safety. 2