The Office for Budget Responsibility has cast serious doubt on the government’s housing ambitions, forecasting that housebuilding will fall significantly before any recovery later in the decade.
Despite Rachel Reeves insisting in her Spring Statement that the government’s economic plan is working, no new housing measures were announced.
Industry figures say the forecast confirms that planning reform alone will not deliver 300,000 homes a year and that a slowdown is now effectively locked in.
What the OBR said
In its latest forecast, the OBR said net additions to the UK housing stock will fall from an average of 260,000 a year in the early 2020s to a low of 220,000 in 2026-27, as weaker housing starts work their way through the system.
While supply is expected to recover to just over 305,000 by 2030-31, the watchdog was clear that the impact of planning reforms “has yet to meaningfully materialise in outturn.”
Cumulative net additions between 2025-26 and 2029-30 are forecast at 1.3 million – only around 30,000 higher than expected in November – suggesting little short-term acceleration despite government reforms.
This will mean the second consecutive year of missing housing targets with the government building just 62% of homes in their first year in power.
House price inflation is projected to average just over 2.5% across the forecast period, broadly in line with earnings growth, with mortgage rates on existing loans expected to average 4.5%.
What Rachel Reeves said — and what was missing
In her Spring Statement, Reeves argued that the government’s economic plan was “the right one in a more uncertain world,” pointing to falling inflation, reduced borrowing and rising investment.
However, there were no new housing interventions, no additional funding for delivery, and no further measures aimed at accelerating supply beyond previously announced planning reforms.
The absence of fresh policy comes despite the government’s stated ambition of delivering 300,000 homes a year - a figure that now appears totally out of reach in the near term based on the OBR’s projections.
What those in the housing sector have said
Reaction to the Spring Statement was not expected to be positive with "dire" warnings being given prior to Reeves's announcement, and this turned out to be true as reaction has been broadly negative.
Adrian Plant, Director of SOWN, the shared ownership division of LRG, said: “We were not expecting a raft of new housing measures today, so the absence of fresh support is no surprise. However, this is an admission that annual housing targets cannot be met. Planning reform is not a quick fix - the hard work of turning policy into local plans, permissions and completions takes time.”
Lawrence Turner, Director of Boyer (part of LRG), added: “The OBR expects housing delivery to fall to around 220,000 homes in 2026/27 before rising to just over 305,000 by the end of the decade. This demonstrates that last year’s planning reforms won’t have an instant impact. Reform on paper is one thing, delivering it at local level is another.”
Brian Berry, Chief Executive of the Federation of Master Builders, commented: “Today’s Spring Statement was a missed opportunity to deliver the decisive action the construction industry urgently needs. Without clear policy detail, long-term funding and a plan to support SMEs, warm words do not translate into real jobs or homes.”
Collectively, these voices underline that while the Spring Statement emphasised economic stability, it failed to provide actionable measures to tackle the housing slowdown flagged by the OBR, leaving delivery dependent on future reforms actually being implemented at local level.
