Labour talked big, but London housing starts are worst since WW2
Labour has talked big on housing and planning reform, but the figures don’t lie, writes Emma Revell
As someone who spends a fair bit of time thinking and talking about our housing crisis, I’m pretty unshockable. Lousy landlords, horrible housemates, bedrooms the size of postage stamps, ‘well we just need rent control actually’, I’ve heard it all.
But sometimes you come across a piece of data so bad you just have to stop and take it in.
In the last financial year, just 4,170 new homes began construction in London. That is a 72 per cent reduction from the previous financial year.
4,170.
In a city with 9m people. In a city where London councils estimate 210,000 Londoners – including over 100,000 children – are homeless and living in temporary accommodation. Where over 300,000 households are on waiting lists for social housing. Where the average rent for a one-bedroom property is over £1,300 a month in all central London areas, and over £1,100 in all but three parts of outer London.
Every year since 1946, London has seen the completion of over 10,000 homes, according to my colleagues at the Centre for Policy Studies. With fewer than half that number started, the consultancy Molior predicts that only 4,550 homes a year will complete construction in both 2027 and 2028.
London’s numbers might be particularly egregious – this is likely to be the most challenging housebuilding period since the Second World War – but the capital is not alone. According to CPS analysis, it turns out in 2024/25 every English region saw a fall in housebuilding. And let’s be honest, none of them were doing a great job the year before.
East Midlands, down 19.5 per cent. West Midlands, down 13.5 per cent. The North West, down 25.5 per cent. Overall, England’s new housing starts were down 17 per cent – meaning 23,140 fewer homes were started than the year before. And each successive year of failure adds to the cumulative under-building that plagues the country, making fixing the housing crisis in its entirety feel like an impossibility.
And readers will know all too well that failure to provide adequate housing has knock-on impacts far beyond just high housing costs, in particular here in London.
When housing is unaffordable in the capital, businesses struggle to hire workers who live close enough to come into the office without bookending each day with an arduous commute. If businesses can’t expand, the wider economy suffers.
When parents – or wannabe parents – can’t afford to get on the housing ladder until their mid-30s or can’t afford that two- or three-bed until even later, they won’t have as many children as they may otherwise have wanted to, or even any kids at all. The impact of a declining birth rate will be felt for decades to come, first through school closures – which we’ve already started to see in some London boroughs – and then through fewer workers, meaning fewer taxpayers.
Labour’s failed housing revolution
Labour came into government with a clear focus on housebuilding; in fact figures from Hansard show ‘planning reform’ was mentioned a record 520 times in Parliament in 2025.
It wouldn’t be fair to suggest the government has done nothing to deliver on their promise of 1.5m homes by the end of this parliament. They just haven’t done anywhere near enough. Rhetoric far exceeded reality.
True, London had an emergency package of measures announced in the autumn which will go some way to alleviate the particular difficulties around building in the capital. Rolling back Sadiq Khan’s excessive and counterproductive affordability requirements should make it easier for developers to make a return on new sites. And the removal of costly dual aspect regulations which required architects to contort new developments into unsightly shapes to squeeze in additional windows was also welcome.
However, many of these measures were only temporary. And the government has yet to have the confidence to tackle the huge problems with the Building Safety Regulator (BSR), a relatively new quango which is imposing ludicrous delays on plans to build or renovate taller developments, even when those renovations would improve the quality of existing homes. The changes to the BSR that it has brought in are desperately short of what is needed.
True, the draft of the National Planning Policy Framework unveiled just before Christmas will, if it survives contact with reality, unlock hundreds of thousands of new homes, many of which will be in and around London, with easy access to jobs in the city. But first it will need to stand strong against well-organised activists and campaign groups who think any construction work anywhere remotely green should be objected to on principle.
There are of course dozens of other factors ailing the housing sector, not least lack of skilled staff, increased cost of labour and materials, and rising energy bills. But without a government that is willing to back up talk with action, our housing crisis isn’t getting truly fixed any time soon.
Emma Revell is external affairs director at the Centre for Policy Studies