England's shrinking pipeline: what’s in store for developers after 2025?
Plus, London private housing starts fall to lowest level in 14 years
3 minutes to read
Last week, the government lambasted new housing delivery levels under the previous leadership, claiming its policies will “tackle the dire inheritance head on”.
On the one hand, the sector has warmly welcomed the raft of proposals to accelerate development, from bringing back mandatory housing targets, easing greenbelt restrictions and accelerating infrastructure projects, all of which have heightened interest in strategic land purchases.
Ramping up housebuilding is key to the UK’s growth plan, evidenced by the airing of fresh planning reforms ahead of Chancellor Rachel Reeves' speech this week on the economy. These included a default 'yes' policy for commuter hub housing developments, backing for a regeneration project at Old Trafford in Manchester, and land releases around transport hubs to drive nationwide growth.
However, in the short to medium term, the market is braced for a supply crunch, with completions in the capital coming under particular pressure looking further out. Only 6% of private sites under construction in London right now are scheduled to run into 2027 – none are set to run past 2028, according to Molior data out this week.
Given housing demand remains high and available stock is decreasing, those building now could strengthen their market presence as competition eases and new launches become less frequent.
While the goal of building 1.5 million homes in the first five years of this parliamentary term is still in its initial stages, new data out this month reveals that England's development pipeline is shrinking.
Residential planning approvals across England hit a fresh record low in the third quarter last year, with just 7,344 plans granted—a significant 40% drop from the most recent peak in Q3 2016, when over 12,900 approvals were secured.
In the 12 months to end September, housing starts in England fell 40% to 97,610 units, although this precipitous descent can in large part be explained by an artificial surge the year before ahead of new environmental regulations coming in.
Completions are also trending downwards, 7% to 156,940 over this time period. Energy Performance Certificates, which can be used as a proxy for completions, were down 5% for 2024 overall versus the previous year.
London spotlight
In the capital, private housing starts in London fell to their lowest level in 14 years in 2024, down nearly 70% from their 2015 peak. Build-to-rent (BTR) starts have also hit their lowest annual level since 2014, our data shows.
Private completions rose 18% in 2024 and are expected to increase in 2025 before declining in 2026 due to a lack of long-term projects, creating an opportunity to launch schemes in 2026/27 with minimal competition.
The sales market came under renewed pressure last year, with the exception of ongoing strong demand for new phases of long running regeneration projects by well-known developers.
Key drivers
On the positive side, inflation is coming down, and interest rate cuts are anticipated. However, the current cost of finance and weak sales market remain significant pressures, with builders increasingly turning to bulk deals.
Developers are also grappling with planning delays, a lack of first-time buyer incentives, and a limited pool of buyers for affordable section 106 units, with Registered Providers (RPs) pulling back from bids as they scale back to focus on existing properties and fire safety remediation costs.
With dwindling stock and strong housing demand, developers have a chance to secure buyers and establish a foothold as competition lessens and new developments grow scarcer.