Reports from Savills and the Home Builders Federation reveal home completions remain flat, as the number of new home sites granted planning permission fall.
According to the latest English Housing Supply update from Savills, 202,7000 homes were built in the year to Q2 2026, reflecting only a 0.4% rise compared to the last quarter. Savills predicts housing delivery will remain static at almost 100,000 homes short of the government policy target.
The figures are reflected in the Home Builders Federation’s latest Housing Pipeline report, based on data from Glenigan. Approval for just over 54,000 homes was granted in the first three months of this year – significantly below the level needed to achieve the government’s ambition for 300,000 annually, as housing supply and new consents for future delivery “continue to flatline” at around 200,000 per annum.
Over the past 12 months permission was granted for 216,141 new homes in England, representing just 58% of the combined annual target for housing delivery of 370,000, established by the government’s own planning system, the National Planning Policy Framework (NPPF).
According to Savills, muted demand for new homes is weighing on developers’ confidence, with smaller developers bearing the brunt of a tough market. As the estate agent notes in its report: “Due to their more limited financial capacity, smaller housebuilders are less able to deploy incentives and face much more challenging market conditions.
“The proportion of homes delivered by the smallest housebuilders decreased by 16% in the year to Q2 2026 as a result of these challenges. Many lenders also started to increase mortgage rates again in July, meaning affordability and buyer demand are unlikely to be fully restored this year.”
HBF estimates that the cost of delivering a new house has increased on average by £76,000 since 2020, with even higher costs for new apartments. “The sector’s ability to invest in new sites has been eroded by suppressed effective demand as a result of the lack of affordable mortgage lending and a subdued housing market such that there is a constrained market for the homes they deliver”, the federation said, noting that this is the first time in 60 years there is no government assistance in place for home buyers.
The number of larger sites, of 10 or more units, has also continued to fall steadily. Just 408 sites for 10 homes or more received approval in Q2 – the lowest quarterly figure since 2006.
Nationally, over the past decade, the typical number sites of 10 or more units being granted consent has halved from around 1,000 per quarter in 2016 to 408 in the most recent quarter – 13% down on the same time last year.
Over the last 12 months there has been a steady increase in the number of the smallest sites receiving planning permission, which HBF says is a response to “the positive policy environment”.
But at just 3% of all permissions granted, the increase “will not make a meaningful difference to housing supply”, HBF added.
Neil Jefferson, HBF chief executive, explained: “Whilst the government’s planning reforms have been positive, because of challenging housing market conditions and the long-term assault on housing viability, the new and improved planning system is still not delivering.
“These positive moves to boost housing supply are being thwarted by the growing level of taxation and cost of policy requirements that are making many sites simply unviable to develop. In a little over a month, government will introduce another new tax on new homes in the form of the Building Safety Levy, which will make a host of potential sites unviable at a stroke so the overall environment for home building looks like it will remain tricky in the short term.
“Meanwhile, concerns around interest rates and the economy and a lack of affordable mortgage lending, in particular for young people, is suppressing demand for new homes and so limiting industry’s ability to build them.
“If government wants to see housing supply increase it has got to look wider than planning and tackle the two major constraints of site viability and affordability. If it does, the industry stands ready to increase output, deliver more private and affordable homes, create jobs and boost growth.”
