The boss of one of Britain’s largest developers has warned Labour is on course to miss its housebuilding targets – as figures showed a slump in the sector.
Berkeley chief executive Rob Perrins said taxes and red tape were holding the industry back.
And gross domestic product (GDP) figures published by the Office for National Statistics (ONS) showed the construction sector shrank by 1.3 per cent in November.
Over the three months to November, meanwhile, it contracted by 1.1 per cent – the worst performance since March 2023 – the ONS revealed.
The figures echoed recent data suggesting the construction sector was in its most prolonged slump since the financial crisis in 2008.
Housebuilder Taylor Wimpey was the latest to warn of sluggish performance.
Building slump: Berkeley chief executive Rob Perrins (pictured, left, with Chancellor Rachel Reeves) said taxes and red tape were holding the industry back
And a Bank of England poll of lenders yesterday showed that demand for mortgages fell in the final quarter of last year at the sharpest pace since the end of 2023 – and was expected to fall again over the next three years.Â
It is a far cry from Labour’s ‘build, baby, build’ mantra and the party’s plan to see 1.5m homes built over the course of this Parliament.
Berkeley boss Perrins, asked if the Government will hit the target, simply said: ‘No.’
On the ‘housing unpacked’ podcast with Knight Frank, he said the industry was ‘overtaxed’ while grappling with new regulations such as the building safety levy to fix dangerous cladding and defects.
‘You need to stop bringing in new regulation,’ said Perrins.
He added that uncertainty over Rachel Reeves’ Budget hit housing last year, but was ‘encouraged’ by signs of life in the market after ‘an unusually good couple of weeks at the start of the year’.
Perrins also said: ‘What is fundamentally important is that we get the feel-good factor back.’
Meanwhile, Taylor Wimpey said Budget uncertainty had weighed on sales in the second half of last year, spilling over into 2026.
Chief executive Jennie Daly said: ‘Demand continues to be muted, particularly among the important first-time buyer category, which will constrain overall sector output.’
The firm said sale prices were under pressure as building costs rose, meaning profit margins were expected to be lower this year than in 2025.
Shares fell by as much as 5.5Â per cent on the update before recovering to close just 0.1 per cent, or 0.1p, down at 103.8p. They are down by 15Â per cent since a peak in June last year.
The update came a day after rival Vistry reported a fall in sales in 2025, saying Budget uncertainty led to a ‘more subdued market’.
Earlier in the week, Persimmon, another builder, said that it had built more homes than expected in a ‘challenging’ market last year, but said it was ‘not expecting any material improvement in market conditions this year’.
DIY INVESTING PLATFORMS
AJ BellAJ Bell
Easy investing and ready-made portfolios
Hargreaves LansdownHargreaves Lansdown
Free fund dealing and investment ideas
interactive investorinteractive investor
Flat-fee investing from £4.99 per month
FreetradeFreetrade
Investing Isa now free on basic plan
Trading 212Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
Share or comment on this article:
Labour housing plans in tatters as construction sector suffers worst slump since the financial crisis