Planning delays, softer sales and regional shortfalls weigh on future housing supply
New‑build housing delivery in England fell to its lowest annual total since 2015 last year, with underlying indicators suggesting little near‑term improvement.
Energy Performance Certificate data show 202,800 homes were completed in 2025, about 3% fewer than in 2024 and 18% below 2019. The figure is almost 100,000 homes short of the annual level needed to meet government ambitions and amounts to roughly 55% of the requirement implied by the Standard Method for housing need.
Although the year‑end total was slightly above the annualised rate seen at the end of the third quarter, it still marks the weakest year for completions in a decade, including the pandemic period.
National House Building Council figures indicate that the earlier recovery in starts is fading. Total starts in 2025 were 5% higher than a year earlier but slipped by 2% over the quarter, leaving volumes below the annualised level recorded in the third quarter.
The fall was concentrated in “alternative” tenures, including affordable housing and build‑to‑rent, where starts were down 11% on 2024. Private housing starts rose 16% over the same period. Overall completions declined by about 3% in 2025 versus 2024, with a modest 3% increase in alternative completions offset by a 1% fall in private completions.
While NHBC data do not cover all new homes, they provide a clear signal that momentum in new‑build activity is softening.
The planning pipeline deteriorated further in 2025. Initial estimates based on Glenigan and Home Builders Federation data suggest around 180,000 homes gained full planning consent last year, down 27% on 2024 and about 12% below the annualised position at the end of the third quarter.
On current figures, permissions appear to have fallen back to levels last seen in the early 2010s, implying further pressure on future completions. All English regions are understood to be undershooting their assessed housing need under the Standard Method.
London is the most acute case. Approximately 30,500 homes were completed in the capital in 2025, about 35% of the level implied by the Standard Method. The number of homes gaining consent there is reported to have more than halved compared with 2024, suggesting that output in the capital will remain subdued.
Across England, six of nine regions granted consent for fewer homes than were completed in 2025, indicating a contracting pipeline. The South East was the only region where consents exceeded completions by a meaningful margin, and even there the gap, at around 5%, was narrow.
Planning applications, however, appear to be rising. An estimated 320,000 homes were submitted for planning in the year to the third quarter of 2025, pointing to potential for approvals to recover over time.
Developers continue to identify planning delays as the main brake on building. The latest NHBC sentiment survey shows about 80% of developers citing delays as a major constraint. By contrast, land availability is becoming less pressing: only around 14% of respondents reported land as a limiting factor, reflecting slower sales and reduced pressure to replenish land banks.
On the demand side, major housebuilders are reporting sales rates of roughly 0.6 reservations per outlet per week, with little sign of acceleration. Larger firms have increased their use of incentives and selective discounts to support volumes; smaller and medium‑sized builders, with less financial capacity to cut prices, have seen sharper falls in output.
Completions among builders ranked 11th to 50th by volume declined by about 10% in 2025. For firms outside the top 50, completions fell by about 17% and are now estimated to be more than a third below 2021 levels. The 10 largest housebuilders increased their share of total delivery by around 8% last year, supported by a run of growth in annualised completions.
For lenders and intermediaries, the combination of weaker permissions, softening starts and uneven demand suggests a constrained new‑build pipeline over the medium term, particularly in high‑cost regions such as London, the South East and the South West.
Lower mortgage rates and some regulatory easing have begun to improve affordability, but overall housing market activity is expected to remain muted. Forecasts for 2026 point to around 1.15 million transactions across the UK, with new‑build sales likely to track overall market volumes. On present trends, a sustained rise in completions to levels consistent with Government targets appears unlikely in the short term.
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