Building 1.5 million homes in this Parliament is an already monumental challenge. Reforms to the National Planning Policy Framework have helped pave the way, but planning is only one barrier. Viability is arguably a bigger issue. Construction costs remain extremely high, and many councils still expect and require significant proportions of affordable housing, making development increasingly risky and less profitable, even when planning risk is lowered.
“Island of Strangers”, Reform and the deliverability of 1.5 million homes
20 May 25
Policy is all about trade-offs. No policy in human history has ever benefited everyone, and government objectives often conflict with each other. This presents a fundamental challenge: which objective should take priority, and which should be neglected? Many factors shape that decision, but the rapid rise of a challenger party with a near-singular focus on one objective makes the choice much clearer—at least for a government keen to survive more than one term.
I’m referring, of course, to the competing goals of cutting immigration and delivering 1.5 million new homes. With Reform UK – a party whose dominating sales pitch is slashing immigration – winning over 670 council seats earlier this month, Keir Starmer’s major shift on immigration is no surprise. It is reminiscent of David Cameron’s decision to promise a referendum on EU membership in 2015 whilst under pressure from UKIP—governments routinely realign policies under political pressure, often at the expense of existing plans.
Building 1.5 million homes in this Parliament is an already monumental challenge. Reforms to the National Planning Policy Framework have helped pave the way, but planning is only one barrier. Viability is arguably a bigger issue. Construction costs remain extremely high, and many councils still expect and require significant proportions of affordable housing, making development increasingly risky and less profitable, even when planning risk is lowered.
New immigration rules announced alongside Starmer’s “island of strangers” speech, introduced tougher visa requirements, higher salary thresholds, and steeper employer fees. This comes at a time when the construction sector is already experiencing severe labour shortages. In fact, a 2024 report by the Construction Industry Training Board found that 251,000 additional construction workers are needed by 2028.
These changes will make it harder for the industry to recruit foreign labour, placing even greater pressure on the Government to upskill domestic workers quickly – a challenging task within this Parliament. The likely result is fewer construction workers in the UK than would otherwise be the case—raising labour costs and reducing capacity at a time when the country can least afford it.
The Government’s recent policy shift suggests a recalibration of priorities—placing greater immediate emphasis on cutting immigration over housing delivery targets. This does not mean the 1.5 million homes target has been abandoned, but it does reflect a political reality: governments often respond to emerging electoral pressures with a view to remain in office, even if it means neglecting existing objectives.
To discuss how the changing political landscape could affect your work, get in touch with the Strategic Advisory Team today.
Theo Taylor
Consultant,Engagement