What happened to 'build baby build'? Construction slumps in final quarter of 2025 as Labour's homebuilding target looks impossible

Construction Slumps in Final Quarter of 2025 as Labour's Homebuilding Target Looks Unattainable

The construction sector in the UK has experienced a significant decline in the final quarter of 2025, raising concerns about Labour's ambitious homebuilding targets. The downturn is attributed to rising material costs and labor shortages, which have hindered project completions across the country.

What happened

Data released by the Office for National Statistics indicates that new housing starts fell by 15% compared to the previous quarter. This marks the lowest level of construction activity since early 2023. Analysts suggest that ongoing economic pressures, including inflation and supply chain disruptions, are contributing factors to this decline.

Why this is gaining attention

The Labour Party has set a target of building 300,000 homes annually to address the housing crisis. With current trends showing a sharp decrease in construction, there are growing doubts about the feasibility of meeting this goal. Stakeholders in the housing market, including developers and local authorities, are voicing concerns over the implications for housing availability and affordability.

What it means

This slump in construction activity could lead to prolonged housing shortages in the UK. It may also impact government policies aimed at increasing homeownership and reducing homelessness. The situation calls into question the effectiveness of current strategies to stimulate the housing market and could necessitate a reevaluation of Labour's housing policies moving forward.

Key questions

• Q: What is the situation?
  A: Construction activity has declined sharply, with new housing starts down 15% in Q4 2025.
• Q: Why is this important now?
  A: It raises concerns about Labour's ability to meet its homebuilding targets amidst ongoing economic challenges.