HBF's Planning and Policy Advisor for Wales, Mark Harris, provides an overview of the party manifestos in Wales and what the home building industry needs from the next Welsh Government.

The Senedd election campaign has now come to a close and voters are heading to the polls.

As we wait for a new Welsh Government to be decided, it is worth taking stock of the manifestos, which have presented a mixed picture of what lies ahead for home builders after the election – and raise questions about whether the level of political ambition matches the scale of the challenge.

The election comes at a critical moment for the home building industry in Wales. Housing delivery fell to its second-lowest year on record in 2024/25, as only 4,638 homes were built, with the average annual delivery rate during the past five years being only 5,100 homes.

This needs to be contrasted against the Welsh Government’s latest estimates of additional housing need, published in February, suggesting that around 8,700 new homes per year are needed up to 2030 simply to keep pace with household growth. Alongside this, there is an existing unmet need of 9,400 affordable homes in Wales.

Taken together, this implies that housing supply will need to at least double from current levels to meet housing need in the next Senedd term. This gap cannot be closed without a serious step change in policy

It is against this backdrop of falling supply and unmet need that a new Welsh Government will operate. The Home Builders Federation (HBF) released its blueprint for increasing housing supply in Wales in September, setting out priority areas where action and intervention are needed to reverse these trends.

Yet policy to support new private house building in the party manifestos has been far from ambitious, despite the urgency of housing need.

The importance of a mixed-tenure approach to housing policy

Across the board, there is clear recognition of the need to increase supply. All the major parties have set targets for either total homes or affordable and social housing, ranging from 10,000 to 40,000 over the next four years, with Labour proposing 100,000 homes over ten years. While a positive step, these targets focus primarily on affordable housing, with less emphasis on the role of market delivery in addressing overall need.

HBF has previously highlighted the importance of an all-tenure approach, reflecting the interconnectedness of affordable and market delivery. Indeed, approximately a third of new build affordable homes have been delivered by private house builders through Section 106 agreements in recent years.

These legal agreements between local authorities and developers require nearly all new private developments to deliver a percentage of affordable homes - meaning the more private homes that are built, the more affordable homes can be delivered.

Affordability for first-time buyers

Alongside supply, maintaining demand will also be critical for housing delivery. This election also comes at a challenging time for the housing market, with the conflict in the Middle East creating economic uncertainty and restricting mortgage availability. In this context, support for first-time buyers remains important, particularly in supporting effective demand for new homes.

The Conservatives and Labour have confirmed a continuation or expansion of Help to Buy Wales, a product which has successfully supported over 15,000 new home purchases in its 11 years of operation, with over three quarters of these households being first-time buyers.

Labour has suggested expanding the scheme to second-hand homes, although this has the potential to dilute the beneficial impact of the scheme on housing supply.

Meanwhile, Reform has suggested scrapping the scheme and replacing it with new targeted incentives. With Help to Buy Wales currently due to expire in September, clarity on future support for first-time buyers is vital, not least because Wales is the only UK nation maintaining a dedicated scheme of this kind.

Development agencies that support all housing delivery

Another key theme is support for a new delivery body for housing. The Conservatives propose re-establishing a Welsh Development Agency, while Plaid has also set out plans for ‘Unnos’, a new national development body. In addition, the Greens support a national social housing developer. Such organisations could help to support housing delivery -particularly in the affordable sector - in a similar way to Homes England.

However, it would be a missed opportunity if such an organisation doesn’t support housing delivery of all tenures, given the interconnected nature of overall supply. Such a body could also be particularly useful in supporting SMEs to access finance and land. SMEs have been increasingly impacted by planning delays, the shortage of developable small sites, a huge increase in the complexity of regulations and policy costs and availability of finance in recent years, with the number of active SMEs in Wales continuing to decline.

Any new delivery body would need to tackle these issues to support existing companies to play their part in housing delivery, while also encouraging new companies to enter the market.

In conclusion

As current polling indicates that the makeup of the incoming Government will likely be very different to the previous iteration, the home building industry will face the prospect of significant policy change. It is encouraging that there is a growing consensus across the parties on the need to increase housing supply and reduce the complexity of the planning process.

However, four years is a relatively short period in which to deliver meaningful increases in housing supply. The key test after 7 May, therefore, will be whether the next Welsh Government can act quickly and decisively enough to support delivery at the scale required to meet Wales’ housing need.