The lender argues that specialist finance, including short-term and development loans, is critical to bridging this gap

With the UK government continuing to fall short of its housing supply targets, specialist finance is increasingly seen as a crucial tool for addressing the ongoing shortage, according to West One Loans.

The firm said products such as bridging and development finance could play a decisive role in accelerating construction, supporting smaller developers, and enabling the government to move closer to its target of 1.5 million new homes by 2030.

Recent data from the specialist lender shows that, over the past five years, an average of 231,234 net additional dwellings have been delivered annually across England, with the South East recording the highest average at 40,458 homes per year. Despite this, the current pace of delivery remains below the level required to meet the Labour government’s housing ambitions.

Labour has pledged to build 1.5 million new homes by the end of the decade, equating to 370,000 completions each year. However, West One’s research indicates that, at present rates of new-build starts, it could take nearly 12 years to reach this target—more than twice the five-year timeframe set out in the party’s manifesto.

The lender argues that specialist finance, including short-term and development loans, is critical to bridging this gap.

While new homes are being delivered, the current pace is not enough to meet national housing demand and, based on the average number of homes delivered over the last five years, we’re already starting on the back foot when it comes to addressing the housing crisis, said Thomas Cantor, co-head of short-term finance at West One Loans.

We simply can’t afford the luxury of a slow start to Labour’s housing delivery ambitions and, in this respect, the specialist finance sector can play a pivotal role in driving market activity, he said.

Cantor added that bridging and development finance provide the flexibility and speed developers need to unlock projects and bring forward housing that may otherwise remain stalled.