12th September 2026
Britain has a housing shortage.
The Government has promised to tackle it by building 1.5 million new homes during this Parliament, an average of around 300,000 a year but the latest construction figures from the Office for National Statistics raise an uncomfortable question.
Where are all those houses going to come from?
The ONS estimates that total construction output fell by 0.5% in the three months to July 2026. This followed four consecutive periods of growth, including increases of 1.3% and 1.5% in the three months to April and May respectively.
More worrying from a housing point of view is what happened to new work.
New construction work fell by 0.4% over the three months to July, while repair and maintenance fell by 0.7%.
Then came the July figure.
Overall construction output managed to increase by just 0.1%, but that increase came entirely from repair and maintenance. New work actually fell by 0.4%.
And within new work, private housing output fell by 4.9% in July.
That is not the direction the Government needs if it is serious about dramatically increasing the number of homes being built.
The target is enormous
The Government's ambition is to deliver 1.5 million homes over the course of the Parliament, with a target of around 300,000 a year.
That is a very substantial increase from the numbers Britain has generally managed to build.
The problem is that houses cannot be produced simply by announcing a target.
Land has to be available. Planning permission has to be obtained. Developers have to believe that the homes can be sold. Builders need workers, materials and finance. Infrastructure has to be provided.
And then somebody actually has to build the houses.
The latest ONS figures suggest that the last part is currently proving difficult.
A small monthly increase hides the problem
The July figures could easily produce a more positive headline.
Construction output increased by 0.1% during the month.
But that tells only part of the story.
The increase came from repair and maintenance, which rose by 0.8%. Private housing repair and maintenance increased by 1.7%.
New work, however, fell by 0.4%.
That distinction is important.
Repairing an existing house is valuable economic activity, but it does not add another home to the housing stock.
Britain needs both, but if the Government wants millions of additional homes, it needs a substantial increase in new construction.
Instead, the latest figures show the new-build side moving backwards.
Can the Government speed things up?
It certainly intends to.
The Government has been attempting to reform the planning system, increase housing investment and expand social and affordable housebuilding. In August it announced the first wave of funding from its £39 billion Social and Affordable Homes Programme, while continuing to describe the 1.5 million target as a central commitment.
But there is a difference between making it easier to build houses and actually building them.
Even if planning restrictions are reduced, developers still face construction costs, borrowing costs, labour shortages and uncertain demand.
There is also a basic capacity problem.
If the construction industry is already struggling to increase output, asking it to produce hundreds of thousands of additional homes each year is not simply a matter of telling builders to work faster.
More workers have to be trained.
More apprentices have to enter the industry.
More materials have to be produced.
More sites have to be serviced.
And the finance has to be available.
None of those things can be created overnight.
The Government may therefore be fighting the clock
The longer construction remains below the level required, the more difficult the mathematics become.
Suppose the country falls significantly short of 300,000 homes in one year.
Those homes do not disappear from the Government's target.
They effectively have to be made up later.
That means an even higher rate of construction in subsequent years.
And if the industry is already struggling to reach 300,000, asking it to build substantially more later becomes even more difficult.
This is why the latest ONS figures matter.
They do not prove that the Government will miss its 1.5 million target. Construction output is volatile, and one month's figures should never be treated as a forecast.
But they do suggest that the required acceleration has not yet appeared in the construction data.
Indeed, the immediate direction of private housing new work is the opposite.
There is another warning hidden in the figures
The ONS has also revealed a data error affecting public housing new work dating back to 2022. It says the error increases the level of construction output by approximately 1.2% from January 2022 onwards, although it does not affect GDP growth to one decimal place. The historical data will be corrected through the Blue Book process.
That does not change the basic July story, but it is a useful reminder that construction statistics can be revised.
The more important point is that Britain cannot build its way out of a housing shortage by relying on targets alone.
The Government can change planning rules.
It can provide grants.
It can set targets.
It can encourage councils and developers.
But ultimately houses have to be built.
And the latest ONS figures suggest that, at least for now, Britain is not building them quickly enough.
The Government still has time to accelerate construction.
But if it cannot get the building industry moving substantially faster, the 1.5 million target may begin to look less like a plan and more like a very large number written on a piece of paper.
For a country desperately short of homes, that would be a problem that cannot be solved by another announcement.
For details see https://www.ons.gov.uk/businessindustryandtrade/constructionindustry/bulletins/constructionoutputingreatbritain/july2026