England's ambitious target to build 300,000 new homes a year looks increasingly out of reach, with latest forecasts predicting annual completions will fall far short of this goal. Savills' analysis suggests an average of just 167,500 homes will be completed annually between now and 2029/30 – less than half the government's target.
The property firm warns that over the next two years, completions are set to drop sharply, with only 152,000 new homes anticipated in 2026/27, followed by a similarly low figure of just over 150,000 in both 2027/28. This comes on the back of a reported 4.1% decline in completions to 190,602 in the year to March 2025 – a 10.2% reduction since the Help to Buy scheme concluded.
Several factors are exacerbating this dire outlook. Emily Williams, Director of Residential Research at Savills, notes that while housing delivery has shown resilience recently, underlying trends suggest otherwise. Low planning consents and construction starts have resulted in a reduced pipeline of homes under development. Furthermore, affordability pressures, higher interest rates, and increasing development costs are simultaneously constraining demand from buyers and the financial viability of new projects for developers.
Developers are struggling to bridge the widening gap between building costs – which have surged by 17.5% over four years – and house prices, which have only risen by 4.5%. This disparity, combined with higher interest rates, is making it increasingly difficult for developers to commence new schemes and for buyers to afford new homes. The result? Construction starts have plummeted by 31%, and the issuance of energy performance certificates for new homes has declined by 16% in the three years to December 2025.
The government's repeated emphasis on increasing housing supply to boost affordability and drive economic growth is now under intense scrutiny. With targets consistently missed, the projected shortfall poses a significant challenge to these objectives. While some experts are optimistic about initial planning process improvements, caution prevails – it will take time for these changes to translate into completed homes.
The Opposition Labour Party has long been critical of the government's record on housing, arguing that targets are consistently missed and the current planning system is flawed. They have proposed reforms aimed at streamlining planning and increasing affordable housing provision, highlighting the impact of insufficient supply on householders and communities across England.