Starmer will never build 1.5m homes and guess who’s going to get the blame | Personal Finance | Finance

Starmer and chancellor Rachel Reeves are pinning their hopes of reviving the economy on their plan “to get Britain building again”. By throwing up 300,000 new homes every year for the next five years, they hope to ease the housing crisis and create jobs in construction and a host of spin-off industries.

As part of this, Starmer vowed to “bulldoze” through Britain’s planning restrictions. He will force councils to free up land, slap compulsory purchase orders on landowners and swat Nimbys aside like flies.

His plans will destroy green spaces, cause years of noise and disruption, and put even more pressure on hard-pressed local services.

Starmer is so certain that “build, baby build” is the only solution to the UK’s swelling population that you wonder why previous governments didn’t think of it.

Except, of course, they did.

After winning the 2019 election by a landslide, former Tory PM Boris Johnson pledged to build 300,000 homes a year.

It didn’t happen. In practice, the UK consistently struggles to build more than 150,000 homes a year, half that amount.

Many on the left put this down to Tory incompetence. They think it will be child’s play with Keir Starmer in charge.

So who will they blame when he fails in exactly the same way Boris?

Boris wasn’t the only one to fall short.

In 2007, the last Labour government set a target for 240,000 homes a year. Five years later, we built less than 142,000 homes.

In 2012, the coalition government gave it another shot, as David Cameron slimmed down UK planning rules. Five years on, we did manage to knock up 194,000 homes.

That’s still well short of Starmer’s ambitious target, though.

Starmer could fare even worse, and here’s why. Property completions by the big FTSE 100 housebuilders are falling, not rising.

Barratt Developments is the UK’s biggest house builder. In the year to June 30, 2022, it completed 17,206 homes.

One year later, it finished just 14,004, a drop of 18.6 percent. It pinned this shortfall on a “lower order book and more muted demand”.

Barratt expects to complete even fewer homes this year, between 13,000 to 13,500.

It’s a similar story at Taylor Wimpey, the UK second biggest housebuilder. Completions fell from 14,154 in 2022 to 10,848 in 2023.

Taylor Wimpey expects them to fall this year, too, to between 9,500 and 10,000.

The first year of Starmer’s five-year masterplan will be a washout.

There’s no way the big, volume housebuilders are going to ramp up completions in years two, three, four and five, either. Why would they do that, when it will only drive down prices?

Especially since Starmer has said many of these homes have to be “affordable”, which will squeeze margins further.

Also, housebuilders face a massive shortage of skills and labour.

The only way round this is to open the floodgates to more immigration. Unfortunately, immigrants need somewhere to live too, creating a vicious circle where the UK will need to build even more homes.

Starmer is setting himself up to fail and this time he won’t be able to blame Tory incompetence.

Sensibly, he has prepared an escape plan. He’s put deputy PM Angela Rayner in charge of the programme.

The two aren’t close, politically, and Starmer no doubt hopes to pile all the blame on her when his grand plan crumbles to dust, as it surely will.

Maybe that green space next to you will survive after all.