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Housebuilders have warned Labour will miss its target of building 1.5million new homes over five years in a fresh blow to Chancellor Rachel Reeves, it has emerged. Developers are reported to have told the Office for Budget Responsibility (OBR) that its forecasts for economic growth from house building are too optimistic. In a private letter to the watchdog, seen by The Times, the Home Builders Federation (HBF) said the Government was on track to miss a key Labour manifesto pledge. Ahead of last year's general election, Labour vowed to overhaul the planning system and build 1.5million new homes across England over the course of a parliament. But the HBF is said to have warned that sluggish demand, alongside higher costs of environmental and building safety regulations, meant the target wouldn't be reached. In March, the OBR forecast there would be 305,000 new homes built a year in the UK by the end of the decade. This would see a total of only 1.3million new homes across the entire UK from this year to 2029/30, the watchdog estimated. It said Labour's planning reforms would only add an extra 170,000 new homes, but the Government claimed the OBR had not factored in other key changes being made. The Treasury is said to have wanted the OBR to look again at its forecasts for economic growth from housebuilding ahead of the Budget next month. But the HBF letter makes it less likely the OBR will raise its forecasts - while it could even result in a downgrade and deliver a further blow to Ms Reeves. The Chancellor is currently scrambling to plug a multi-billion pound hole in her spending plans ahead of her Budget on 26 November. That gap is the result of higher borrowing costs, more persistent inflation and weaker growth, along with having to fund Labour's U-turns on winter fuel payments and welfare cuts. Ms Reeves has also acknowledged there could be a larger-than-expected downgrade to the OBR's productivity forecasts, which would make her task even harder. In the letter, HBF chief executive Neil Jefferson said the OBR's housebuilding numbers were now 'only achievable' if the Government provided help for first-time buyers to stimulate demand and reduced planned taxes on new homes that were making many sites 'unviable'. 'The OBR's forecasts for housing supply were ambitious,' he said. 'The numbers are only achievable in the right policy environment.' Labour MP Chris Curtis, chair of Labour Growth Group, said his party was 'at risk of not hitting our targets because reform has been too slow'. 'The House of Lords has been holding up legislation, and the Government hasn't been strong enough in standing up to opposition,' he said. 'That's why we now need to go further, by reforming the building safety regulator, fixing the broken approach to nature regulation, and swiftly getting on with the New Towns programme.' Faraz Baber, the chief operating officer of planning consultancy Lanpro, said the Government's 1.5 million home target had been 'missed already'. 'The government likes to talk about 'build baby build', but the UK has not hit the rate of construction which is now required to meet the target, even in the post-war years. 'If they even get to a million homes, then they will have done a good job.' A Government spokesman said: 'We will leave no stone unturned to build the 1.5million homes this country desperately needs and restore the dream of homeownership. 'On top of the major planning changes we have already introduced to get developers building and our huge £39billion investment in social and affordable housing, we are going further and faster to accelerate reforms and bring about the biggest era of housebuilding in our country's history.
