A new report by Savills has cast doubt on the government's ability to meet its target of delivering 300,000 new homes a year. The property consultancy predicts that England will average just 167,500 new home completions annually over the next five years, falling short of the government's target.
The report warns that a shrinking development pipeline and ongoing affordability pressures are to blame for the decline in new home completions. Savills estimates that just 837,500 homes will be completed across England by 2029/30, down from the government's target of 1.5 million homes by 2029.
The report highlights a sharp contraction in development activity, with annual planning consents down 39% over the past three years. Housing starts have fallen 31% over the same period, while EPC registrations for new homes are down 16%.
Savills also notes that build costs have risen 17.5% since February 2022, while house prices have increased by just 4.5%, squeezing margins and making many schemes harder to deliver.