Hitting ambitious housebuilding and affordable homes targets hold key to reducing private rents

The Government will need to both hit and sustain its unprecedented target of creating 1.5 million new homes at least over this Parliament and the next to reduce pressure on private rents and temporary accommodation, according to new Resolution Foundation research published today (Saturday).

The Housing Outlook Q3 2025 finds that that hitting the Government’s target of 1.5 million new homes in England over this Parliament, equivalent to around 300,000 new homes per year, would arrest the recent decline in Britain’s housing stock relative to its population. The number of homes per 1,000 adults in England would rise from 535 in 2024 to 543 by 2029, roughly the same level as 2021.

With higher levels of housing-stock-to-population associated with lower average private rents, the Foundation says that hitting this hard-to-reach housing target over the next decade should ease pressure on housing costs. This target is ambitious however – only once in the past 50 years has Britain added more than 250,000 homes in a year (1987).

Boosting Britain’s affordable housing stock will be an even greater challenge. The supply of these has fallen drastically from a peak of 154 per 1,000 adults in 1979 to just 88 in 2024. The consequences of these five decades of decline are clear. 1.3 million households were on local authority waiting lists in England as of March 2024, while 131,000 households (containing 169,000 children) were in temporary accommodation in England in March 2025.

The Government’s allocation of £39 billion through the Social and Affordable Homes Programme (SAHP) over the next ten years is a welcome attempt to address this decline, particularly the commitment to spend 60 per cent of this on homes for social rent.

The report calculates that, should this programme deliver 30,000 homes per year over the new decade, alongside the private sector also building affordable homes under section 106 agreements at the same rate it has done for the past five years, then Britain’s affordable housing stock would rise marginally to 91 per 1,000 adults in 2034. That said, sustained building at this rate over 10 years would only take levels of affordable housing per person back to 2017.

Furthermore, the Government must ensure that new homes are built in the right places. The authors argue that the Government faces a trade-off on whether to focus efforts on areas that are least affordable, or those that have the greatest productivity potential. Some places like London, Oxford and Cambridge tick both boxes, but others don’t.

The report says that areas such as Greater Manchester and Birmingham with huge productivity potential hold the key to boosting economic growth. These should therefore be prioritised over those pricier areas with low productivity potential, such as South Hams on the Devon coast. These major cities may be relatively affordable now, but housing demand and cost pressures will increase as productivity grows if housing stock doesn’t keep pace.

Concluding, the report says that the Government should redouble efforts to hit its housebuilding target, sustain this into the next decade, and ensure that housebuilding efforts boost economic growth and reduce housing costs, especially for the poorest families.

Imogen Stone, Researcher at the Resolution Foundation said:

‘’The Government has set itself a hugely ambitious target of building 1.5 million homes over this Parliament. If this level of new homes could be sustained over the next decade, it would help to reduce housing cost pressures, but on its own still won’t be enough to deal with Britain’s wider housing woes.

“Britain’s affordable housing stock relative to its population has been falling for five straight decades. The welcome £39 billion Social and Affordable Homes Programme will need to deliver in full, and the private sector will have to step up, if we are to end this decline.

‘’Britain will also need to build these new homes in the right places. Targeting the building of private and affordable housing is crucial – not just in expensive areas, but in rapidly growing ones too like Birmingham and Manchester which hold the key to boosting economic growth.’’