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The Construction Products Association (CPA) is forecasting that house-building will not even return to 2022 levels until at least 2028 and will not return to pre-pandemic levels until 2029 or 2030.

Furthermore, the government is likely to miss its own target (1.5 million new homes by 2029) by 30%, even before any potentially negative impacts of the forthcoming budget next month.

CPA chief executive Peter Caplehorn has written to chancellor Rachel Reeves pressing for reinstatement of government support for buyers, particularly first-time buyers.

Caplehorn told Reeves: “We recommend the Home Builders Federation’s idea for a replacement equity loan scheme for first-time buyers which would boost first-time buyers’ deposits, giving them access to new build mortgages at lower loan-to-value ratios which are priced more affordably.  Developers would pay a fee like the ‘commercial fee’ payable by mortgage lenders for access to the mortgage guarantee scheme, whilst HMG would retain the full equity share and potential returns.”

He also recommends a ‘delivery authority’ for the retrofit of the UK’s existing housing and, in infrastructure, a focus on repair and maintenance over grand new projects.

 “Infrastructure investment in major new projects is critical for the medium and long-term.  In a tight budgetary environment however, by focusing efforts on near-term basic repairs and maintenance that have a quicker turnaround, the UK economy and productivity could enjoy an immediate return on investment for taxpayers along with a sizeable stimulus for the sector,” Caplehorn writes.

The CPA’s autumn forecasts, published earlier this week, downgraded expected growth from 1.9% to 1.1% this year and from 3.7% down for 2.8% for 2026 because of a sluggish summer for the construction industry. The pickup in construction activity that had been expected at the start of the year has not materialised. Without the expected economic growth, the risks and uncertainties around the impact of impending tax rises in the budget on 26^th November have only intensified, the CPA said. This is likely to leave households, businesses and investors holding off spending and investment decisions for longer, which limits demand in the largest construction sectors.

CPA economics director Noble Francis said: “Construction has already lost more than 11,000 construction firms since the start of 2023, and given the current low levels of house building and home improvement, we expect construction insolvencies to accelerate in 2026. A new positive, time-limited stimulus for house building demand is urgently needed from the government – particularly for first-time buyers – before insolvencies further damage skills and capacity throughout the construction supply chain, including architects, builders’ merchants and product manufacturers, as well as house builders and specialist contractors. Without these firms and their critical skills and capacity, any sustained recovery in house building will be more difficult, slower, and more expensive over the course of this parliament.”

CPA chair Adam Turk, who is also chief executive of insulation manufacturer Siderise, added: “Our industry has a responsibility to flag the likelihood of worsening job losses, skills shortages and manufacturing capacity unless this government acts to stimulate growth in this essential sector. This is not scaremongering but rather an honest reflection of what is happening on the ground.  

“We have already seen house-building collapse in London but are encouraged that government has recognised the crisis facing industry there and intervened to help.  That help is needed across the country now, with a particular focus on supporting new home buyers who are struggling with affordability.  Industry stands ready to build and support the government’s aspirations, with significant investments in people and capacity already committed by hopeful businesses since the 2024 election, but much of this could be in vain without a much-needed boost to the market.”

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