The National House-Building Council (NHBC) has released its quarterly report, revealing a sharp decline in new home registrations across the UK. In the first quarter of 2026, new home registrations totalled 63,400, a 10.2% decrease from the same period in 2025. This downturn is attributed to a 'perfect storm' of rising construction costs and falling demand for new homes, leaving housebuilders facing significant economic pressures.
The report highlights that construction costs have increased by 12.5% year-on-year, driven by rising materials costs and labour shortages. Meanwhile, demand for new homes has slowed due to economic uncertainty and affordability concerns. This perfect storm has resulted in a decline in new home registrations, with many housebuilders struggling to maintain profitability.
For UK households, this decline in new home registrations may lead to a shortage of affordable housing options, exacerbating existing housing market challenges. Mortgage holders and investors may also be affected, as a decline in new home registrations can impact property prices and rental yields.
The Bank of England has been monitoring the UK's housing market closely, with Governor Andrew Bailey stating that the Bank is 'closely watching' the impact of rising construction costs on the economy. The Bank's Monetary Policy Committee has also raised concerns about the potential impact of the housing market on UK inflation.