New Housing Developments at Lowest Level Since 2017

Data from Rightmove indicates that new build developments coming to market have plunged to their lowest level since January 2017. Construction firms blame building costs, delayed projects, and higher interest rates. [1, 2] 

Current Challenges in the Market

• Target Shortfall: The decline threatens the Labour government's pledge to deliver 1.5 million homes during the current Parliament. [1]
• Affordability Gap: While the broader housing market boasts an 85% increase in total homes for sale compared to 2022, there remains a critical shortage of affordable homes. [1]
• First-Time Buyer Squeeze: Elevated material costs and high interest rates have delayed new builds. Industry experts are calling for tax relief to assist buyers. [1]

Market Perspectives

Data from Rightmove and Mortgage Strategy highlights the difficulties facing developers and buyers alike. [1, 2]

“Viability is a huge challenge for developers. Building costs, development obligations such as affordable housing and local infrastructure, higher interest rates and many more factors need to be accounted for which has become more challenging.”

Rightmove

“Despite the historically high number of available homes for sale, there is still a long-term shortage of affordable homes in the right place....We need more homes to support people at every stage of the moving journey, from first-time buyers to downsizers.”

Mortgage Strategy

Key Points:

• Housebuilding is at an eight-year low
• This raises questions about Labour's ability to fulfil its promise of building 1.5 million homes during this Parliament
• Despite new build declines, total homes for sale is now 85% higher than in 2022