The number of new home approvals in the UK has fallen to its lowest point in a decade, underscoring the significant challenges the government will face in meeting its

ambitious housebuilding goals. According to the Home Builders Federation (HBF), only 53,379 new homes were approved in the three months leading up to June, marking the lowest quarterly total since 2014, as reported by City AM.

In the year leading up to June, approvals dropped by 12% to just over 230,000 units—the lowest figure for any 12-month period in the past decade. The HBF attributed the decline to the previous government’s approach to housebuilding, particularly in relation to planning policies, which have caused a steady drop in approvals over the last two years.

Significant Declines Across Regions

The sharpest declines in home approvals were seen in London and the East Midlands, where approvals fell by more than 40% over the past year. Neil Jefferson, chief executive of the HBF, emphasized that the figures "starkly illustrate the challenge the new Government faces to boost housing supply."

Labour’s Ambitious Housing Targets

The new government has placed housebuilding at the forefront of its economic agenda, with a goal to build 1.5 million new homes over the course of the parliamentary term. Achieving this would require housebuilding rates to reach their highest levels since the late 1960s.

To meet these ambitious targets, the government has introduced significant reforms to the planning system, including reinstating mandatory local authority targets and reviewing green belt regulations. However, experts have expressed skepticism about Labour’s ability to meet its targets. The HBF has pointed out that planning permissions would need to increase by 55% to hit the annual goal of 370,000 new homes.

Housing Crisis and Economic Impact

The UK's ongoing housing crisis is largely driven by a lack of supply, with the average property now valued at 8.3 times the average annual wage, a steep rise from 4.5 times in 2002. Additionally, the construction of new homes has declined by 46% from 1970 to 2023, further exacerbating the issue.

As the government faces mounting pressure to address the housing shortage, the last time annual housebuilding rates approached these levels was when social housing accounted for two-fifths of all new homes, as noted by the Resolution Foundation.

The government’s ability to overcome these challenges will be critical in delivering much-needed housing and stabilizing the housing market.