Welsh government set to narrowly miss its 20,000 homes target, says Audit Wales

Without this, the report estimated that between 15,860 and 16,670 homes will be delivered by the deadline.

Since setting the target, the government clarified that it is counting some homes that are not new builds and that are not low carbon.

“There are options to make funding go further, including shifting the balance towards more acquisitions of existing homes, but these may not offer value for money over the longer term,” the report said.

According to its own estimates, the government has 19,913 homes either delivered or in the pipeline for delivery, falling short of the goal.

So far, it has spent £1.27bn on schemes that contribute to the target, with a notional capital budget of £730m remaining.

It has delivered between 8,859 and 9,197 homes towards the target, according to government figures up to March 2024.

The failure is partly due to pressures outside the Welsh government’s control, including rising costs, Audit Wales said.

Adrian Crompton, auditor general for Wales, said: “Price inflation has hit the affordable housing programme hard. The Welsh government now faces difficult choices about its funding priorities and approach if it remains committed to meeting or getting close to its 20,000 social homes target by March 2026.”

Audit Wales recommended that the government check the costs and benefits of changing the balance between new build and acquisitions and publicly report how many of the homes counted towards the target are new build and low carbon.

It also called on leaders to review how affordable housing need is calculated and develop a long-term approach to funding affordable housing.

A spokesperson for the Welsh government said it would consider the report’s recommendations and respond in due course.

“There are a range of factors impacting housing supply, not least the recent sustained period of record inflationary pressures, which has made achieving the target even more challenging. We continue to work with the housing sector to deliver more homes,” they said.

Hayley Macnamara, head of policy and external affairs at Community Housing Cymru, the membership body for housing associations in Wales, said: “Providing certainty and overcoming delivery constraints are crucial to unlock the existing barriers in place, so we support the report’s recommendations to develop a long-term approach to funding and delivering social housing.”

Matt Dicks, national director of the Chartered Institute of Housing Cymru, said: “Whilst we agree that more investment is needed, we also need to provide more resource to planning departments, tackle issues within our supply chains and ensure we have enough contractors to carry out the work.

“We need a whole-system approach to meeting the target and now is the time to be ambitious and radical by making housing a foundational mission for government, by legislating for the incorporation of the right to adequate housing into Welsh laws.”

When she was cabinet secretary for housing, local government and planning, Julie James admitted earlier this year that the government was hanging on to the target “by the skin of our teeth”.

Jayne Bryant was appointed as Ms James’s successor after she resigned over first minister Vaughan Gething’s continued leadership. He stepped down in August.