Britain's housing target at risk as unused bricks pile up amid rising costs

Britain's ambition to construct 1.5 million new homes by 2029 is facing significant headwinds, with half a billion bricks reportedly lying unused across the country. The rising cost of producing bricks, driven by increased energy prices and exacerbated by geopolitical conflicts, is making them more expensive.

This cost pressure is leading major housebuilders to reassess their land acquisition strategies. Barratt Redrow, the UK's largest housebuilder, announced it intends to approve between 7,000 and 9,000 plots of land for purchase in its current financial year, a reduction from its previous guidance of 10,000 to 12,000 plots. Consequently, the company now expects to spend between £700 million and £800 million on land, down from an earlier forecast of £800 million to £900 million. The company cited "geopolitical events" and their potential impact on mortgage rates and build costs as reasons for its more selective approach.

Similarly, the London-focused housebuilder Berkeley has decided to halt new land purchases, implement a hiring freeze, and reduce its reliance on subcontractors. These decisions by prominent developers signal a challenging environment for meeting the government's housing targets.

In Labour's first year in power, 140,860 homes were completed in England, and just under 116,000 homes were started, falling short of the approximately 300,000 annual run rate required to achieve the 1.5 million home target over five years. Measures such as planning reforms and a £39 billion investment in social and affordable housing have been introduced, but high interest rates, rising construction costs, and complex planning rules continue to impact the sector, particularly in London.