Savills Research has forecast that new homes completions in England will average 167,500 per year over the five years to 2029/30, falling significantly short of the government’s annual target of 300,000 homes.
Savills projects that 837,500 new homes are expected to be delivered in total over the five years to 2029/30, broadly in line with the 20-year average. It predicts that the most challenging period is expected to come over the next two years, as low levels of planning consents and starts constrain the development pipeline and affordability pressures weigh on demand.
The latest figures show new homes completions fell by 4.1% to 190,602 in the year to March 2025, meaning completions have dropped by 10.2% in the two years since the Help to Buy scheme ended. Savills estimates around 189,000 new homes were built in 2025/26 but expects output to fall sharply over the next two years to just over 150,000 homes in both 2026/27 and 2027/28.
The report identifies a combination of supply and demand-side pressures behind the weaker outlook. On the supply side, annual full planning consents for new homes have fallen by 39% in three years to around 180,000 in 2025, while starts are down 31% and EPCs for new homes have fallen by 16% in the three years to December 2025. On the demand side, affordability remains stretched, with developers experiencing a mismatch between rising costs and more subdued house price growth.
Savills says development viability is the key challenge. In the four years to February 2026, build costs rose by 17.5%, while house prices increased by just 4.5%, making it increasingly difficult for schemes to get off the ground.
The report finds that, despite the weaker short-term outlook, there are some early signs of improvement in the planning system. Residential applications rose by 44% in the last year, back to levels seen in 2022 and 2023, while a higher success rate at appeal suggests recent reforms are beginning to result in more positive decision-making. However, Savills says it will take at least 18 months for this to feed through into higher completion volumes.
Emily Williams, director of residential research at Savills, commented: “England’s housing delivery has proven to be reasonably resilient in the face of recent economic headwinds, but the underlying picture is becoming increasingly challenging. Low levels of planning consents and starts mean a thinner pipeline of homes under construction, while affordability pressures, higher interest rates and rising development costs are constraining demand and viability. The result is that completions are likely to fall sharply in the short term, with our forecast pointing to just 152,000 new homes in 2026/27. There are encouraging signs at the start of the planning process, but it will take time for those improvements to feed through. In the meantime, boosting demand remains the clearest policy lever for lifting delivery.”
Savills says a buyer support scheme could materially improve delivery. If introduced now, a new scheme could support 85,000 completions by the government’s March 2029 deadline for their 1.5 million home target, and 120,000 within the report’s forecast window, with 92,000 of those homes estimated to be additional.
Under that scenario, completions could rise to 198,000 homes per year by 2028/29, which, though still below the government’s target, would be enough to maintain housebuilding at the average rate seen over the last decade despite current headwinds.”
