The warning comes despite the party making housebuilding one of its defining missions in government

Labour's flagship promise to build 1.5 million homes is collapsing under a mountain of red tape, soaring taxes and spiralling building costs, leading experts warn.

The warning comes despite Labour making housebuilding one of its defining missions in government, with a pledge of £39billion over the next decade for affordable and social housing alongside sweeping planning reforms designed to accelerate development.

Despite this, housebuilding completions in England last year were 20.5 per cent lower than in 2022, marking a third consecutive annual decline, according to official figures.

Now Britain's leading construction economist warns the worst is yet to come.

University College London expert Professor Noble Francis, Economics Director at the Construction Products Association (CPA), said the industry was facing a "perfect storm" of rising costs, mounting regulation, and weakening demand.

New forecasts from the CPA show private housebuilding is set to fall by a further seven per cent this year, with public sector building down four per cent, despite ministers' promise to unleash a new generation of homes.

He warned the Government's priority should be stopping the industry shrinking even further.

"The key issue for the Government is not 1.5 million homes," he said. "The key issue is stopping housebuilding falling further."

He warned Britain risks losing skilled builders for good if the downturn continues, leaving future governments unable to deliver the homes the country desperately needs.

Housebuilding has already fallen for three consecutive years.

"If housebuilding falls for the next 12 to 18 months, then you're into four or five years. You can't keep those capacity and skills. If, or when, housebuilding starts to recover, where will the skills come from?"

He warned once tradesmen leave construction after years of uncertainty and shrinking workloads, many never come back.

Instead, they retrain, retire or move into other industries, leaving Britain without the workforce needed to build hundreds of thousands of homes.

Professor Francis said ministers had piled so many extra rules, taxes and levies onto developers that viable building sites are simply disappearing.

He said it was not one individual policy causing the damage but the cumulative weight of more than ten separate regulations and charges introduced by different parts of government.

Each one may appear reasonable in isolation, he said, but together they are making many housing developments impossible to build.

Among the mounting burdens are biodiversity rules, nutrient neutrality requirements, tougher building regulations, higher employers' National Insurance contributions, increases in the National Living Wage, the Building Safety Levy, new Future Homes Standards, soaring industrial energy bills and fresh steel import tariffs.

The Home Builders Federation estimates those additional costs now add around £76,000 to the cost of a typical new low-rise home built over the past five years.

Professor Francis said there was no escaping the extra costs.

He said: "The buyer has to pay more. Or, if you destroy site viability, the home doesn't get built."

He also warned the UK is slowly hollowing out its construction industry.

Manufacturers producing bricks, concrete, glass and other essential building materials are mothballing factories or shutting plants altogether after years of falling demand and rising energy costs. Many never reopen.

"There is a long-term gradual hollowing out of manufacturing," he warned.

Professor Francis said Labour's drive to speed up planning decisions and remove barriers to development would help, but would not solve the crisis because many housing sites simply no longer made financial sense to build.

Instead, the biggest barriers are affordability for buyers in the South and the rising cost of building almost everywhere else.

He called on ministers to help solve the problem by reducing the burden on builders by cutting industrial energy costs and temporarily lowering fuel duty to lower costs across the construction supply chain.

He also called for a temporary loan scheme to help first-time buyers onto the housing ladder and measures to reduce mortgage costs.

Without action, he warned, Labour risks presiding over a construction industry that no longer has the capacity to deliver its biggest election promise.

"The key message is with any issue you want to tackle, you need to understand the side effects and the knock-on impacts," he said.

"The Government, in trying to tackle lots of different specific issues individually, hinders its overall objective."

His forecasts suggest England is on course to deliver around 940,000 net additional homes over the current Parliament.