Labour's housing plans in tatters as developers build fewer homes

Updated: 08:18 EDT, 4 November 2026 Labour’s housing plans have been dealt a fresh blow after one of Britain’s biggest developers revealed it is building fewer homes than it was a year ago.In a gloomy update, Barratt Redrow said it sold 3,223 new properties in the 17 weeks to October 25 – down 442 or 12 per cent on the same period last year.Chief executive Dean Banks blamed ‘challenging market conditions’ as well as ‘continued pressure on affordability’ as would-be buyers struggle to raise a deposit and get a mortgage.The update rammed another nail in the coffin of Labour’s plans to oversee the construction of 1.5million new homes in this Parliament.In documents published alongside the Budget last week, the Office for Budget Responsibility cut its forecasts for new homes built by 2031 by 190,000.A total of 1.14million homes are expected to be added to Britain’s housing stock over this Parliament. A Barratt Redrow development in TamworthThat is well short of the target and fewer than 1.18million over the previous five years from 2019-24 – which included the Covid-19 pandemic when building sites were closed.Andy Burnham has now revived Help to Buy through the new Your First Home scheme which will offer first-time buyers with a 2.5 per cent deposit loans to get on the housing ladder.But the rollout has been delayed until April next year – threatening to plunge the housing market into the deep freeze until it comes online as would-be buyers hold off until then.Giving the scheme a lukewarm reception today, Barratt said: ‘Whilst we welcome the introduction of Your First Home to support housing delivery over time, it is too early to assess its impact on first-time buyer activity.’Housebuilders have been hit by soaring costs – partly stemming from the Iran war but also from Labour’s tax hikes and reams of red tape and regulatory costs.At the same time, rising mortgage rates have made it harder for would-be buyers to get on the housing ladder and other families to move.The Bank of England looks set to raise interest rates tomorrow for the first time in more than three years – pushing them up from 3.75 per cent to 4 per cent.Development projects have also been hit by planning delays despite Labour’s pledge to speed up the system.A host of Britain’s biggest builders have now scaled back development plans because they are no longer viable, including Taylor Wimpey, which will not begin new schemes in London once its current projects are finished, while Berkeley Group has all-but stopped buying land in the capital.Barratt shares edged up around 1 per cent today as the company stuck to its financial guidance for the year – but the stock remains down some 15 per cent this year.Russ Mould, investment director at AJ Bell, said: ‘The market reacted with relief that housebuilder Barratt Redrow is sticking with its current guidance, but these full-year targets could be built on shaky foundations given recent market trends.‘Completions are under pressure thanks to rising borrowing costs, which could make achieving the expected level of full-year volumes a tough ask.‘Demand in the private market is weak, reflected in lower reservation rates, although institutional buying for the private rental sector has helped pick up the slack. Barratt is doing its best to mitigate rising input costs through a disciplined approach, but margins are likely to remain under pressure.‘The order book looks relatively robust, and Barratt has a strong enough balance sheet to provide a buffer against the current sector headwinds while still being able to reward investors for their patience with share buybacks.‘Like its peers, Barratt will be looking ahead to the launch of the Your First Home scheme. While this could provide a helpful fillip, it seems unlikely to be as impactful as the Help to Buy scheme was in the 2010s.‘What Barratt and the wider industry needs is an improvement in the inflationary and interest rate environment, which is linked to global factors over which it has zero control.’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you