The government must address the barriers to development if it is to build the homes the country needs, says Stewart Baseley, chairman of the Home Builders Federation.
As we enter the final quarter of 2025, the forward-looking picture remains extremely challenging. The latest Housing Pipeline report from HBF examines the number of homes permissioned in between April and June this year, which will be those largely built over the coming three or four years. Just 44,520 new homes were approved in England during the second quarter of this year. This is a 17% fall compared to the same period last year, with permissions sitting a third lower compared to the market’s peak.
These alarming indicators also mark the lowest recorded quarterly figure since 2012. Equally concerning, only 1,410 sites were approved in the second quarter of 2025, marking the 10th consecutive quarter of decline. The evidence is clear: housing supply is still in decline, with long-term consequences for the government’s ambition to deliver 1.5million homes this parliament.
Against this backdrop, the reshuffle of the prime minister’s cabinet has created a new opportunity to reset the agenda. Following Angela Rayner’s resignation, Steve Reed MP has been appointed as Secretary of State for Housing. Early signs are encouraging, and Reed has pledged “to pull every lever to get Britain building,” reaffirming the government’s commitment to tackling the long-standing barriers that have constrained supply. We welcome this early engagement and the clear political will to boost housing delivery.
Yet, while recent planning reforms mark a positive step, much more must be done to create the conditions for builders to deliver the homes that communities urgently need. As the recent research from HBF suggests, government’s efforts to boost housing supply and support the homebuilding industry have not been strong enough.
The forthcoming Autumn Budget will be a critical moment for ministers to set out a credible plan that addresses the barriers stalling development, restores confidence, and ensures viability across the industry. Three priorities stand out.
First, viability has become a top concern for the industry, as a series of existing and upcoming costs threaten to render many sites unviable. Taking building safety as an example, homebuilders already contribute substantially to cladding remediation, including through the £2billion Residential Property Developers Tax and a further £4.4billion in voluntary commitments. Despite this, the government has confirmed plans to introduce the Building Safety Levy (BSL) next year, a further £3.4billion tax on the industry. The introduction of the BSL, which is expected to add £3,000 on average to the cost of building each plot, will further compound the viability challenges facing industry. Moreover, it will be levied on builders of all sizes, regardless of whether they have built anything taller than a two-bedroom semi-detached house. We have written a letter, signed by 100 homebuilders, to the chancellor warning that this burden will mean fewer homes – including affordable ones – are built.
Additional pressures include proposed changes to Landfill Tax, that could add thousands of pounds per plot to every new home built, the forthcoming Future Homes Standard, and higher employer National Insurance contributions. Collectively, these measures undermine site viability, discourage investment and ultimately reduce output.
Second, support for first-time buyers is sorely needed. With no active government-backed scheme in place for the first time in more than 60 years, rising house prices, higher deposits, and elevated interest rates are permanently locking many would-be homeowners out of the market. The absence of first-time buyers is already weakening demand – and without demand, supply cannot grow.
HBF is calling for the introduction of a new targeted equity loan scheme, funded in part by developer contributions, to support deposits and help buyers access more affordable mortgages. By easing entry for moderate-income households, such a scheme would allow thousands more young people to take their first step onto the housing ladder. At the same time, a new scheme would provide industry with the confidence that it could sell the homes it delivers and so to invest in more new sites, take on more people and really start to press the accelerator.
Third, the planning process is still flawed. Despite positive national reforms, the overly bureaucratic and lengthy journey to take an outline planning consent to the point where construction work can start has never been more complex, uncertain, or expensive. Local planning authorities remain chronically under-resourced, with an estimated shortfall of more than 2,200 planning officers. The government’s pledge to recruit 300 additional officers is welcome but falls well short of what is needed.
The industry’s ability to scale up housing delivery and generate economic growth also continues to be severely hindered by the lack of bids from Registered Providers (RPs) for S106 Affordable Housing units – an issue that is becoming ever more pressing.
Earlier this year, HBF conducted a Freedom of Information (FOI) request with local authorities to determine the potential scale of the issue. Analysis of responses from more than 85 local authorities, extrapolated to all 317 local authorities in England and Wales, indicates around 8,500 S106 units, either under construction or due to commence within 12 months, are not currently under contract with a registered provider. These findings highlight ongoing constraints on delivering both S106 Affordable Homes and market-sale unit, which not only threaten housing supply, but the future of SME developers.
Infrastructure challenges are adding further strain. Developers have paid almost £2.3billion to water companies since 2020, yet planning permission is still being refused or delayed on wastewater capacity grounds, even where water companies have not raised objections. This has already stalled 30,000 homes – alongside £900million in community contributions that would fund schools, roads, green spaces, and public amenities. Urgent action is needed to reaffirm existing planning policy, ensure councils apply it consistently, and guarantee that long-term water infrastructure plans properly reflect housing targets.
These issues are particularly pronounced in London, and an urgent overhaul of housing policy is needed to support the housing needs of Londoners. The recent HBF ‘Mind the Gap’ report reveals that housing delivery in London is in a major crisis, warning that home building targets are currently unachievable. Only 30,000 homes were completed in London in the year to June 2025, down 12% from the previous year and significantly below the 2019/20 peak.
The housing industry stands ready to deliver the homes, jobs, and economic growth the country needs, but unless the Autumn Budget provides clear measures to support viability, demand, and planning capacity, delivery will continue to fall short. The new Housing Secretary’s commitment to “pull every lever” must now be matched by fiscal and regulatory decisions that give builders the confidence to invest.
If ministers grasp the opportunity, we can reverse the decline, unlock stalled sites, and ensure this parliament delivers on its housing promises. But without decisive action, the downward trajectory in supply risks becoming entrenched, with serious consequences for affordability, opportunity, and economic growth.
This article was first featured in Show House Magazine. Read more like this and the latest industry insight here.
