The main reason the government is missing the 1.5 million housebuilding target is a lack of demand, rather than the root cause being a lack of workers.
That is according to Dr David Crosthwaite, chief economist at the Building Cost Information Service (BCIS).
He was responding to a claim by the Construction Plant Hire Association, with Oxford Economics, that 160,000 more builders are required for Labour to meet its housebuilding targets.
Crosthwaite said: “Developers only build at the rate homes can be sold, and buyer confidence is currently subdued by high borrowing costs, limited incentives and uncertainty over market stability.
“Without a steady pipeline of demand, builders won’t expand their workforce or invest in training at the pace government targets assume.
“A shortfall of workers, in that sense, is as much a symptom of weak demand as it is a cause of the reduced delivery volumes we’re seeing.
“Government policy should focus on restoring market confidence, for example by supporting first-time buyers and accelerating investment in infrastructure that unlocks new sites.
“That would give developers and contractors the visibility they need to scale up capacity sustainably.”
Some 500,000 builders are expected to retire in the next 15 years, so there’s a dire need for new blood in the industry, while builders are typically in their only 50s.
The number of workers in the industry is currently going backwards year-on-year.
The only way to make demand less of a big issue would be to increase levels of publicly produced housing, Crosthwaite explained.
He added: “The only way that the government could really influence supply to the degree it seems to be hoping to with its 1.5 million target would be to go back to when local authorities had their own in-house construction teams – direct labour organisations – that could respond to policy priorities.
“Today, delivery depends almost entirely on private developers, who can turn the tap on or off according to market conditions. The government, by contrast, no longer has that ability.
“Unless the government is prepared to consider the broader question of who builds our homes, and how skills, productivity and demand all interlink, policy targets risk misaligning with delivery capacity.”