Labour’s target of building 1.5 million homes during this Parliament “faces serious challenges”, according to an expert, as completed constructions continue to decline.

Housebuilding activity has already fallen to its lowest level in a year, with the latest S&P Global UK construction purchasing managers’ index (PMI) showing residential building activity falling in January for the fourth consecutive month.

Now, Stuart Law, CEO of property finance lender Assetz Capital, said there needs to be planning permission reforms to expedite the house building process amid labour shortages.

He told the Express: “The UK Government’s target of delivering 1.5 million new homes this parliamentary term faces serious challenges. While the commitment is clear, planning bottlenecks and labour shortages make achieving it very unlikely.

“A major barrier is the inefficiency of the planning system. Developer clients of Assetz Capital report that securing planning permission is their biggest obstacle.”

Sir Keir Starmer first announced his promise of building 1.5 million new homes in October 2023, with the pledge also being a key feature of their election manifesto.

However, data from the Office for National Statistics revealed that only 41,220 dwellings were completed between July and September 2024 – a decrease from 52,410 during the previous three months under the Tories.

Further data from the Ministry of Housing, Communities, and Local Government found that the North East of England had the worst completion rate during the same period, at just 1,760 homes.

This is nearly three times less than the South East, which had the highest completion rate at 5,190.

In December, Labour made changes to the National Planning Policy Framework (NPPF), which reintroduced mandatory housing targets and land supply rules.

Despite this, Mr Law said not enough is being done to help small site developers, defined as areas that would fit less than 25 homes. He accused the Government of prioritising large developments, slowing down the house-building process.

He explained: “Recent NPPF changes fail to support small site developments, a key potential driver of housing supply through the large numbers of smaller housebuilders. Despite new NPPF reforms, the huge potential of small site development remains overlooked.

“The system is slow and unpredictable, favouring large developments that require extensive negotiations over infrastructure and affordable housing. Despite new NPPF reforms, the huge potential of small site development remains overlooked.

A Ministry of Housing, Communities and Local Government spokesperson said: “We will deliver 1.5 million new homes and decide 150 planning applications for major infrastructure over five years as part of our Plan for Change.

“Work is already underway to get Britain building again, including overhauling the broken planning system and investing £5billion in housing for this year, while the forthcoming Planning and Infrastructure Bill will help accelerate the delivery of critical infrastructure.”