UK housebuilders struggling to meet government new build target

The general election earlier this year saw all political parties promising to increase the number of new builds in the UK to tackle the ongoing housing shortage. The Conservative party suggested a target of 200,000 new homes per year going forward although early indications from the industry suggest this will be difficult. Bovis Homes is the latest of the U.K.’s leading housebuilders to comment upon the 200,000 target because while the industry is buoyant at the moment there is a growing skills shortage.

Is it really such a big jump?

At the moment the UK housebuilding industry is building around 130,000 new properties per annum. The increase to 200,000 is significant by any stretch of the imagination and it seems as though some companies are struggling to secure capital for investment which will allow them to increase their output. It is highly likely there will be a significant increase in the current output but the figures will fall well short of the target.

Why are housebuilders struggling?

Despite the fact that the UK economy is not yet firing on all cylinders the indications from the industry suggest there is a growing skills shortage. The cost of labour has increased significantly of late as housebuilders across the UK battle to fill their labour requirements. While this is currently being covered by the ever increasing cost of property it is a factor which the industry is taking very seriously.

In many ways this goes back to underfunding of various apprenticeship schemes across the UK by the current government and previous governments. Politicians all talk the talk, promising large amounts of money for apprenticeship schemes, but very often these are underfunded and sometimes fall by the wayside. When you bear in mind there has been a long-term shortage of new builds across the UK surely politician should have seen this skills shortage coming some time ago?

Protecting the price of property

While the UK housebuilding sector seems keen to increase output as much as possible it is also worth noting that a significant increase would impact house price growth in the short, medium and longer term. The simple fact is that the fewer houses available for sale the more competition which effectively pushes up the cost of an average UK property. However, the introduction of affordable housing will give many people opportunities to climb aboard the property ladder and perhaps work their way up in years to come.

When you bear in mind that an investment in your home is likely to be the largest acquisition in your lifetime this is a very tricky situation for the authorities, balancing the need to protect property prices going forward while introducing more affordable homes.


It will come as no surprise to learn that the UK housebuilding industry does not appear to be in a position to hit the government’s target of 200,000 new builds per annum. This would be a significant jump from the current level of around 130,000 although it is likely this figure will grow in the longer term. Access to capital for investment and a growing skills shortage seem to be the major hurdles and without further government assistance it is difficult to see a short-term solution.

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