The Labour Government will fall short of its housebuilding manifesto promise by 662,500 homes, a leading property firm has estimated. 

Savills expects an average of 167,500 new-build homes to have been completed each year between 2024/25 and 2029/30 in England, well below the Government's 300,000 annual target. 

That means just 837,500 new-build homes in total, compared to the 1.5million pledged in the Labour manifesto. 

While this was in line with the 20-year average, it means the Government will fall short of its promise made in 2024. 

During the election campaign, outgoing Prime Minister Keir Starmer promised that his party would 'Get Britain building again' by cutting planning application delays, helping first-time buyers and building on 'ugly' green belt sites. 

But Savills' analysis of official data showed the number of planning consents for new-build developments had dropped by 39 per cent in three years, falling to 180,000 in 2025.

At the same time rising mortgage and debt costs are dampening demand for new-build homes, Savills said. 

The analysis claimed 'it is very challenging for developers to get schemes off the ground'.

The estate agent said it expected sales of new build homes to fall, adding that the length and severity of the war across the Middle East would influence how long for, given its impact on mortgage rates.  

New-build completions fell by 4.1 per cent to 190,602 in the year to March 2025, recent data showed. 

Savills said demand for new-builds had been propped up by grant-funded affordable housing, the build-to-rent sector and the continued use of sales incentives by larger developers.  

In the two years since the Help to Buy scheme ended, new-build completions had fallen by 10.2 per cent, the findings added. 

In the three years to December 2025, the number of new-build developments being started fell by 31 per cent year-on-year, Savills said.

'As a result, we expect that completion volumes will drop sharply from current levels over the next two years, falling to just over 150,000 homes in 2026/27 and 2027/28' the firm added.  

'Development will be challenging in the short term. Low levels of planning consents and starts mean a more limited pipeline of homes under construction, while market demand is impacted by global instability and higher interest rates.'

With Keir Starmer announcing his resignation today, the pressure will be on the Government's next leader to deliver its new-build targets. 

Kelly Boorman, national head of construction at RSM UK, said: 'Starmer’s resignation doesn’t come as a shock to the market, however, it does bring further political uncertainty for the construction industry. 

'Projects committed to in the short term are unlikely to be impacted, but mid and longer-term infrastructure priorities, housing targets and potential policy changes could create additional uncertainty for the industry.'