UK housing targets in doubt as new dwelling numbers fall short

New data on housing supply for 2024/25 indicates 208,000 net additional dwellings were built, which is the official metric for the government's goal of 1.5 million homes this Parliament. 

London, UK - Savills

While slightly higher than anticipated, this figure is down 6% from 2023/24 and falls short of the 300,000 annual average needed, according to Savills.
The decline is primarily due to a reduction in new home sales, which fell to an estimated 115,000 in 2024/25 from 121,000 the previous year. Build-to-Rent (BTR) completions also saw a slight decrease.
Affordable housing remained stable at 59,000 new homes, similar to the prior year. Grant-funded affordable housing increased by about 5,000 homes, reaching its highest level since 2014/15. However, Section 106 contributions for affordable housing dropped to 24,000 homes, the lowest since 2017/18, representing only 40% of new affordable homes compared to a 50% average over the past nine years.
Looking ahead, weekly data suggests housing delivery will remain around 200,000 annually, despite recent dips in new home sales. BTR are at a decade low, indicating no immediate boost from this sector. Affordable housing delivery from grants may face disruptions during a funding transition, though the situation appears stable. Section 106 delivery is expected to decline further due to ongoing challenges and its link to market volumes.
Furthermore, planning consents haven't recovered following government reforms, and the tight gap between consents and completions raises concerns about land supply constraining future growth, even if demand increases.
Given these trends, Savills believes that it is increasingly improbable that the government will meet its 1.5 million new homes target. The upcoming Budget will reveal if measures are introduced to stimulate demand and increase planning resources for land supply.