The stats are stark: families on Bath and North East Somerset council’s social housing list face a 200-year wait for a four-bedroom property and the latest available figures show England is building just a little over 10,000 social homes a year.

Tackling this crisis was a key element of Labour’s election promise to build 1.5m homes over five years, with the government in July announcing plans to spend £39bn building 300,000 affordable homes over a decade, 60% of them for social rent.

But hopes of hitting these targets are fading. In London, housebuilding of all kinds has pretty much stalled, prompting the housing secretary, Steve Reed, and the mayor, Sadiq Khan, to announce a controversial package last week that cuts from 35% to 20% the percentage of affordable units a site needs in order for it to be fast-tracked.

While Reed called the measure a “shot in the arm” to get the capital building, homelessness campaigners are sceptical. Mairi MacRae, campaign director at Shelter, wants “a firm guarantee that the latest changes to planning rules will result in more social housing, not less”.

The package also includes £322m to set up a City Hall developer investment fund, and low-cost loans through the new National Housing Bank. It comes on top of the government’s wider shake-up of planning law to try to speed up construction and boost the economy.

Nevertheless, despite such efforts to pull every lever, progress towards targets remains painfully slow. The number of new homes delivered in England was 231,300 in the year to September, up from 186,600 in the year to June. To hit the 1.5m goal, the UK’s annual rate needs to be at least 300,000, a pace not achieved since 1970.

‘A perfect storm’

Khan, who grew up in a council flat, sums up the problem: “There is now a perfect storm facing housebuilding … due to a combination of high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit.” Added to that are a shortage of skilled workers and new regulations.

These problems are magnified for the social housing sector, where housebuilder profits are inevitably lower. Shelter and the National Housing Federation have calculated that 90,000 social homes a year are needed in England.

However, according to the latest available annual data, of the 63,743 affordable homes completed in England in the financial year to March 2024, just 10,153 were for social rent, a subsidised arrangement for those on low incomes that is typically about 50% of market rate. The remainder were shared ownership, rent to buy and affordable rent (set at more like 80% of the local average).

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Such homes used to be mainly built, owned and managed by councils, but in recent decades housing associations have taken over provision. Yet this supply has dwindled in recent years as these non-profit groups have been clobbered by falling rent income and rising borrowing costs.

They have also faced huge bills to install energy-efficient technologies such as heat pumps, remedy fire safety problems and repair ageing properties, an issue made more all the more urgent by the requirement brought in this week under Awaab’s law to fix emergencies within 24 hours.

That comes on top of years of underinvestment after the coalition government stopped funding social rent housing in 2011. While this policy ended five years later, construction has yet to recover.

Another hurdle has been linking up newbuilds to a council or housing association to manage them. The Home Builders Federation (HBF) has calculated that of the social or affordable homes in England and Wales that are either unsold, under construction or a year away from being built, 10,000 lack a contract with a social landlord.

“Without agreements for housing associations to take over properties, thousands of affordable homes are stalled or left empty, preventing builders from meeting planning conditions*,” *an HBF spokesperson says. “As a result, delivery grinds to a halt, sites are delayed, rephased or in some cases rendered unviable, impacting an estimated 100,000 private market homes and pushing housing targets further out of reach.”

‘Not up to scratch’

A lack of skilled labour is another big problem, raising concerns that build quality could be compromised after scandals around shoddily constructed homes.

“We’ve had problems in the past and bought homes from other developers that were not up to scratch,” says Fiona Fletcher-Smith, chief executive of the housing association L&Q.

“The number of homes that we took over this year were reduced because there’s a particular set of builders where we said ‘No, not good enough, we’re not taking them.’ So we compromised on numbers to keep quality up and the government needs to be aware of that.”

Angela Rayner, then housing secretary, and Rachel Reeves with construction workers at the Bournes Bank development, Stoke on Trent, in March. Photograph: Cameron Smith/Getty

Worker shortages range from roofers to surveyors, and construction cost inflation is running at about 40%. Some materials are also hard to get hold of: recent figures show UK cement production has slumped to a 75-year low.

“The existing workforce is ageing,” says Anthony Codling, head of European housing research at RBC Capital Markets. “We estimate the average age of a bricklayer to be 56. We have too few younger people being trained to replace them as they retire, and since Brexit there has been a significant drop in the number of skilled workers from Europe.”

Fletcher-Smith adds: “Even if you give us all the money in the world, we won’t have the people we need to be able to do what we have to do.”

‘With residents, not done to them’

“Densification” – more units per square metre – has been put forward as a possible solution and was the talk of a social housing forum hosted by Lloyds Banking Group in the summer, although experts stressed it must be done sensitively.

In Basingstoke, Hampshire, Sovereign Network Group (SNG), one of the largest housing associations in England with 85,000 homes, needs to win over residents opposed to “high-density” family housing in multi-storey blocks.

Rows of red-brick bungalows in the Buckskin and South Ham neighbourhoods, which are home to 12,000 people, are to be replanned under SNG’s 30-year regeneration project.

A closed pub in South Ham, Basingstoke, where some residents are concerned about plans to pull down old houses to build multi-storey social homes. Photograph: Martin Godwin/The Guardian

It intends to improve the layout of the 4,600 home area – equal in size to the Olympic Park in London – and build new houses, flats and green spaces, as well as retrofitting some existing homes. The group has recently secured funding to construct more than 25,000 homes across the south, west and east of England over the next decade.

Detailed plans are due to be released early next year but SNG’s initial, hand-drawn sketches, published this spring, have caused anxiety among some tenants and private home owners the Guardian spoke to who fear their homes could be knocked down and replaced with five- to six-storey apartment blocks.

SNG insists that nothing has been decided yet, but one resident ,Maggie Hardy, 79, says demolition of the bungalows would “destroy our community … Older people don’t want to go in a block of flats where the lift breaks down twice a week.”

The revamp could lead to the demolition of some 1960s and 1970s homes and pre-fabs from the 1950s, triggering opposition from residents – although many agree the area needs improving.

“I’m all for it,” says Stephen Baverstock, a long-time SNG tenant in South Ham, who sits on SNG’s co-design group with planners and architects. He says the area needs better cross routes and car parking, and a doctor’s surgery and dental practice, but adds: “We don’t know what the scale of the demolition is going to be and that creates uncertainty.”

SNG has promised to listen and is holding a series of meetings with residents before finalising its plans. Some have written to their MP, Luke Murphy, prompting SNG’s chief executive, Mark Washer, to state publicly that no decisions have been taken yet, and that compulsory purchase orders would be a “last resort”.

Murphy, the Basingstoke MP, says: “This is a close-knit community, built over generations. I have been clear that any plans for the area must be carried out with residents, not done to them.”

Green shoots

In such a challenging environment, some have struggled. Peabody, one of the largest social landlords in England,had its credit rating downgraded by S&P Global Ratings in July after it had a weaker year than expected.

Others argue that Labour’s measures need to be given time to take effect, pointing to the £16bn of public money backing the National Housing Bank and the announcement in June by Reed’s predecessor, Angela Rayner, that social landlords can raise rents by 1 percentage point above inflation over 10 years, giving them the confidence to kickstart construction.

In 2024 a cash crisis forced L&Q, which owns 105,000 homes, to halt some construction. A year on, Fletcher-Smith is more upbeat, with plans to start 2,000 new homes in the coming year. “We’ve had a pretty dire five years,” she says, but now “we have a government that gets the scale of the problem and they really want to fix it.”

A Ministry of Housing, Communities and Local Government spokesperson said: “We’re getting spades in the ground to build 1.5 million homes, with ambitious measures to speed up planning and building.

“We’ve backed the sector with a record £39bn investment to provide the biggest boost to social and affordable housebuilding in a generation, and taken action to tackle specific issues in London and back the capital to build.”