Britain’s leading housebuilders have warned the Office for Budget Responsibility (OBR) that Labour’s target to build 1.5 million homes over the next parliament is unlikely to be met without significant policy changes.

According to The Times, the Home Builders Federation (HBF) and major developers wrote to the OBR privately, cautioning that the government’s ambition is “too optimistic” given current market conditions. The warning comes just weeks before the Autumn Budget, in which the Chancellor is expected to outline measures to support housing delivery.

OBR forecasts fall short

In March, the OBR projected that total UK housebuilding would reach 1.3 million homes by the end of the decade—falling short of the 1.5 million target announced by ministers. At the time, the government claimed those figures did not take into account the Planning and Infrastructure Bill or the Affordable Homes Programme, both of which were intended to boost supply.

However, the HBF’s letter suggests the shortfall will persist unless ministers act to support both developers and buyers.

Call for tax reform and demand support

The HBF reportedly told the OBR that Labour’s housing target would only be achievable if “the government provided help for first-time buyers to stimulate demand and reduced planned taxes on new homes that were making many sites unviable.”

Rising costs, tighter planning requirements, and development levies have combined to squeeze margins on new housing projects—particularly in areas with lower sale values. Developers argue that without relief on taxes and stronger incentives for first-time buyers, many sites will remain stalled.

A separate study commissioned by the National Housing Federation (NHF) found that achieving the 1.5 million homes target would require private housebuilding to expand at a faster rate than at any point in the past 50 years, alongside a major increase in affordable and social housing provision.

Labour on course to miss target

As previously reported by Property118, independent analysis by planning consultancy Lanpro shows that housing delivery is currently 10% below the ten-year average, with completions well under the 300,000 homes per year widely regarded as the minimum needed to meet demand.

At the present rate of construction, industry analysts estimate that only half of Labour’s promised homes are likely to be delivered by the end of the current parliament—unless substantial reforms to planning, taxation, and housing finance are introduced in next month’s Budget.