Accelerated housebuilding and retrofitting will require a boost in construction output and employment
England net additional dwellings (000s)
Housing target of 1.5m dwellings would require more workers
The Labour government’s target is to build 1.5 million homes by 2029 in England.
500
The model is based on assumptions about how quickly housebuilding could increase given a number of constraints. First, the amendment of planning laws will take some time to implement. Second, there is a lag before work begins as planning permission is granted. Third, it takes time to build a property. As such, the modelling assumes that housing starts start to see a boost towards the end of 2025 and the significant boost to completions and net dwellings starts to feed through from 2027. The model assumes that the government reaches its target by 2029, with net additional dwellings peaking at 427,000 in 2028/29. Thereafter, we assume that the England target averages 300,000 per annum. Housing starts in the rest of the UK grow at the same pace as England. This activity is a key driver of our model, particularly of new work on housing.
400
1.5 million target over five years achieved between 2025-2029
300
200
100
0
2002 2005 2008 2011 2014 2017 2020 2023 2026 2029 2032
Climate Change Committee heat pump installation (millions) and real net zero investment in residential buildings (2019 prices, £bn)
Real residential investment (LHS, £bn) Heat pump target (RHS, millions)
Investment into net zero and retrofit will boost activity
15
1.5
To quantify the activity associated with net zero we draw upon the estimates of net zero investment published by the Climate Change Committee (CCC). These are used to model the additional work in housing, non-residential property and infrastructure. We assume that annual investment reaches the CCC’s targets by 2028, using heat pump installations as a proxy for the additional progress that is needed to reach CCC projections.
10
1.0
5
0.5
0
0.0
2020
2023
2026
2029
2032
Sources: Capital Economics, ONS, and the Climate Change Committee
29
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