England homebuilding outlook points to miss on government target, Savills says

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England homebuilding outlook shortfall

Highlights

England is projected to complete an average of 167,500 homes annually to March 2030, far below the government’s 300,000 target, according to Savills.
Planning consents fell 39 per cent and housing starts declined 31 per cent in the three years to December 2025, reflecting resource constraints and reduced developer appetite.
Savills estimates a new Help to Buy scheme could add 85,000 completions by March 2029, but the government has yet to implement such support.

Forecast points to weaker delivery

As reported by Financial Times, citing Savills research, England is expected to deliver an average of 167,500 homes a year in the five years to March 2030, well short of the government’s target of 300,000 annually, although still broadly in line with the 20-year average.

Building 1.5 million homes was a central pledge made by Prime Minister Sir Keir Starmer during the 2024 general election campaign, as Labour sought to address housing affordability pressures. But industry concerns over the target are growing, with the National Housing Federation and the Home Builders Federation saying the government is on course to miss it, partly because of a shortage of construction workers.

Emily Williams, director of Savills residential research, says the outlook for completions is likely to worsen before it improves. She says housebuilding is becoming more difficult not only in London but also in major cities across northern England.

Planning consents have fallen 39 per cent, while housing starts are down 31 per cent in the three years to December 2025. Williams says consents have not recovered as much as expected, reflecting continuing pressure on local authorities that lack the resources to process applications.

Costs, demand and policy shape market impact

Developers have also paused projects as higher labour and construction costs leave many schemes financially unviable. The inflationary effect of the war in the Middle East is adding to uncertainty, while UK housebuilders including Berkeley and Barratt Redrow have cut profit forecasts and pulled back from land purchases.

Higher mortgage rates have also weakened demand from buyers, although rates on some products have started to fall in recent weeks. Savills expects completions to rise again in 2028 and 2029 on an improving sales outlook and support from the affordable housing programme.

A new Help to Buy scheme could provide another boost, with Savills estimating that it could generate an additional 85,000 completions by the government’s March 2029 deadline. While many housebuilders support such a measure, the government has so far resisted offering that kind of stimulus.

The Ministry of Housing, Communities and Local Government says it is building the homes the country needs and has launched a comprehensive mortgage guarantee scheme to support home ownership. The department also says new housing starts have increased by nearly a quarter from a year earlier, helped by planning reforms and measures intended to support developers facing geopolitical pressures.

Our earlier article on the decline of UK returnship programmes described how listings for structured routes back into skilled work have fallen sharply since their post-pandemic peak, even as long-term unemployment has risen. We noted that employers have become more risk-averse amid economic uncertainty, reducing supported re-entry opportunities for parents, carers and people returning after ill health—at a time when the UK workforce is already under strain.

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