The ambitious target of building 300,000 new homes a year in England is under threat due to significant viability challenges faced by developers, according to Colliers. The property consultancy has warned that ministers must address the economic conditions necessary for homes to be built in adequate numbers, rather than just focusing on land supply or higher targets.
Andrew White, head of UK residential at Colliers, points out that slower sales rates for new-build properties are a commercial reality, not a sign of unwillingness to build. Housebuilders align construction with demand, and a slowdown inevitably impacts build-out rates, he explained. The real issue is restoring the economic conditions required for developers to deliver new homes.
Several factors are squeezing the viability of new housing schemes, including escalating build costs, more expensive development finance, prolonged planning delays, and an increasing array of regulatory requirements. These obligations add significant cost and complexity to residential development, according to Colliers, citing affordable housing provisions, Section 106 agreements, the Community Infrastructure Levy, Biodiversity Net Gain, and building safety legislation.
The implications are far-reaching: for first-time buyers, a constrained supply could exacerbate affordability issues, particularly in high-demand areas. While average UK house prices have seen varied movements – £375,000 on Rightmove's June 2026 data and a year-on-year increase of 1.5% from Halifax in May 2026 – the lack of new stock could push prices further upwards. Mortgage rates around 4.5-5% for a typical two-year fixed deal add to the financial strain.
White stressed that abandoning environmental or quality standards is not the solution, but rather acknowledging the cumulative impact of various policies on development viability. He urged ministers to look beyond planning reform and consider broader solutions to increase housing supply, including better-resourced local planning authorities and market confidence measures.