Housebuilding plummets 11 per cent as Labour’s 1.5 million homes target hangs in the balance

It follows ONS figures published in August, which showed housebuilding in the second quarter of this year was 8.2 per cent down on the same period in 2025.

Meanwhile, overall UK construction output has fallen for 21 successive months, according to S&P Global’s UK Construction Purchasing Managers' Index (PMI), which tracks changes in total industry activity.

Steve Mulholland, CEO of the Construction Plant-hire Association (CPA), one of the UK's largest construction trade bodies, represents just under 2,000 firms that supply 85 per cent of the machinery used in British construction.

He said: "These latest figures lay bare what housebuilders and their supply chain contractors across the country have been telling us for months on end: fuel costs are devastating, it's too expensive and risky to hire staff, especially young people, and spiralling tax liabilities are stymying investment.

"We back Andy Burnham’s 1.5 million home target, but housebuilders and supply chain contractors are desperate for support and the cost of living crisis is critically undermining housing market activity.

"Without addressing these challenges, the PM's ambitions cannot be turned into homes for people to live in."

He called on the Prime Minister to take decisive action to give the sector the confidence to invest in the people and equipment needed to hit the target.

"I urge the PM to help Britain's housebuilders deliver the homes we need by reversing the hikes in NICs contributions for those working in construction and reinstating the threshold at which NICs are paid by construction companies.

"Further, housebuilders are crying out for Business Property Relief to be reinstated to kickstart investment.

"By taking these steps, the sector can begin to reverse Britain's housing crisis.”

Rachel Reeves' changes to Business Property Relief at the 2024 Budget have made construction plant-hire firms, many of which are family-run and which supply critical equipment for building homes and infrastructure, liable for huge inheritance tax bills.

The changes to Business Property Relief, which came into force on April 6 , mean any inheritance above a £2.5million threshold will face an effective tax rate of 20 per cent.

The threshold rose to £2.5million from an initial £1million for firms claiming agricultural and business property relief after public outcry.

Construction firms, like farmers, claim they are disproportionately affected because their business value usually lies in equipment and machinery rather than cash reserves, so they cannot pay their tax bill without selling machinery or borrowing against the company.

Separately, increases in employer National Insurance contributions have raised the cost of taking on staff.

According to CPA's latest member survey, 86 per cent of firms reported a negative impact from the NICs rise, and 72 per cent have reduced hiring or frozen recruitment altogether, with many expecting fewer entry-level roles and apprenticeships as a result.

The same survey found that eight in 10 members said recent tax changes had reduced their investment confidence, while three in four did not believe the government's housebuilding target was achievable.

A quarter said it was achievable, but only with "significant policy changes".

GB News has reached out to the Ministry of Housing, Communities and Local Government for comment.