Amid the shock of the Office for Budget Responsibility (OBR) halving its growth forecast last month, one remarkable finding gets too little attention. It predicts housebuilding will rise to its highest level in 40 years, adding 0.2% growth or £6.8bn by 2029-30, potentially rising to more than 0.4% by 2034-35. The government has said that housing scores the biggest positive growth effect from a “zero-cost policy” the OBR has ever forecast.
This is especially remarkable given that 2024 saw the fewest planning permissions granted for new homes for a decade, and the worst on record, according to the Home Builders Federation (HBF). Planning applications plummeted when the last government scrapped councils’ mandatory housing targets, but since Labour reimposed a national planning policy framework, applications in the works have risen by more than 160%.
