The newly appointed Housing Secretary is encountering another challenge as the Government's initiative to construct 1.5 million homes encounters further delays.
The leading property developer in Britain is expected to acknowledge this week that it constructed fewer houses during the first year of Labour's governance compared to the last 12 months under the Conservative administration.
And as another setback, the Bank of England is generally anticipated to maintaininterest rateson pause, with certain analysts predicting that there will be no further interest rate reductions until next spring.
This means hardship for homebuyers expecting lower mortgage rates – and may subsequently affect the demand for new properties.
The Labour party aims to construct 1.5 million new homes during this parliamentary term – equivalent to 300,000 per year.
The initiative was supervised by Angela Rayner, who served as deputy prime minister and housing minister until she was removed from her position due to not paying sufficient taxes on her second residence.
Steve Reed took over the housing responsibility and informed officials that his key principle was "build, baby, build" as he aims to "unleash one of the largest periods of construction in our nation's history."
However, an update from Barratt Redrow, the nation's leading developer, this week will indicate that he faces significant challenges, as official data revealed that house construction is at its lowest point since 2016, excluding the pandemic period.
The FTSE 100 company will announce that it constructed 16,565 homes during the 12 months ending June 29 – a decrease from 17,972 in the previous year when the Conservatives were in government.
The bosses have established a goal to construct an additional 17,200 to 17,800 new homes this year – however, this remains lower than the figures recorded in 2023-24 prior to Labour taking office. Other construction companies are also building fewer residences, with Vistry recently reporting that it completed 6,889 properties during the first six months of this year, a decrease from 7,792 in the corresponding period before the election.
Top executives of Vistry have indicated that the 'uncertainty' caused by 'procrastination' regarding potential property taxes before the November 26 Budget could affect the real estate sector. Additionally, Reed recently stated that his initiatives were 'dead on arrival' following a decline in housing approvals and contracts for upcoming projects.
HSBC analysts stated that no further interest rate reductions are expected in the UK prior to April, as the Bank is almost guaranteed to maintain rates at 4 percent on Thursday.
Aarin Chiekrie from Hargreaves Lansdown stated: 'With the sluggish progress in meeting the 300,000 homes annually target and ongoing affordability challenges for buyers, achieving the 1.5 million new homes goal appears highly unlikely.'