England’s housing delivery set to fall sharply

Housing delivery in England is heading for a steep fall, with the next two years looking particularly tough, a Savills forecast reveals.

It warns that annual completions will average just 167,500 between now and 2029/30, barely more than half the government’s 300,000-home target.

The firm’s projections suggest 837,500 homes will be completed across the five-year period.

That is broadly in line with the average achieved over the past 20 years, but well below the level ministers say is needed.

Need to boost home demand

The firm’s director of residential research, Emily Williams, said: “England’s housing delivery has proven to be reasonably resilient in the face of recent economic headwinds, but the underlying picture is becoming increasingly challenging.

“Low levels of planning consents and starts mean a thinner pipeline of homes under construction, while affordability pressures, higher interest rates and rising development costs are constraining demand and viability.”

She added: “The result is that completions are likely to fall sharply in the short term, with our forecast pointing to just 152,000 new homes in 2026/27.

“There are encouraging signs at the start of the planning process, but it will take time for those improvements to feed through.

“In the meantime, boosting demand remains the clearest policy lever for lifting delivery.”

Affordability hits buyer demand

The immediate outlook is weaker with low numbers of planning consents and construction starts have thinned the development pipeline.

Also, affordability pressures continue to restrict demand.

Completions fell by 4.1% to 190,602 in the year to March 2025 and have now dropped by 10.2% in the two years since the Help to Buy scheme ended.

Savills estimates that around 189,000 homes were built in 2025/26.

Output is then forecast to fall to just over 150,000 homes in both 2026/27 and 2027/28, including 152,000 during the coming financial year.

EPC certifications fall

Construction starts are down by 31%, while energy performance certificates issued for new homes declined by 16% in the three years to December 2025.

Developers are also facing a widening gap between build costs and house price growth.

Those costs rose by 17.5% in the four years to February 2026, compared with a 4.5% increase in house prices.

Savills identified development viability as the central obstacle, with higher interest rates and stretched buyer affordability making schemes harder to start and homes more difficult to sell.