The housing crisis in the UK has reached a nine-year low, with new-build developments plummeting to their lowest levels since January 2017. This stark decline comes despite the government's promise to deliver 1.5 million new homes, raising serious questions about its feasibility in the current market.
Leading property developers and experts are pointing to a perfect storm of factors that has brought the sector to its knees. Barratt Redrow, one of the UK's largest residential developers, has highlighted increased regulatory costs, subdued consumer confidence, and elevated mortgage rates as major hurdles for both buyers and developers.
Steve Mariner, Group Sales and Marketing Director at Barratt Redrow, acknowledged some progress on planning system reforms but warned that "regulatory costs are holding new homes back" while low customer confidence, higher borrowing costs, and economic uncertainty are all making it harder for first-time buyers to get onto the housing ladder.
First-time buyers are being hit particularly hard, with no current government-backed scheme in England to assist them with homeownership. This void comes at a time when support is most needed, according to Mariner, who suggested that a new scheme where developers contribute alongside the government could revitalise the market and stimulate construction.
Rightmove is urging the government to implement key measures in the upcoming Autumn Budget to address these challenges. Top of their list is the removal of stamp duty for first-time buyers, applicable to both new-build and resale properties, which would alleviate a significant upfront cost for those trying to get onto the property ladder.
The viability of new developments remains a critical concern for builders, with rising construction costs, development obligations, higher interest rates, and other economic pressures making projects increasingly difficult to deliver profitably. The average UK house price currently stands at around £288,000, with significant regional variations.