Cormac Henderson, chairman of Spring, looks at the importance of freeing up working capital to help the industry build more houses.
The latest wave of trading updates and announcements from major housebuilders is another reminder that, despite some improving macroeconomic sentiment, conditions on the ground remain challenging for the sector. Slower sales rates, affordability constraints and intense pricing competition continue to weigh on performance across the sector, with a number of operators highlighting similar pressures recently. EY reports that UK-listed housebuilders issued eight profit warnings in the first half of 2026, matching levels seen during the 2008 financial crisis.
While industry debate often focuses on planning reform, construction costs and mortgage rates, there is another factor that deserves greater attention: the role of working capital in supporting housing delivery. When sales rates slow, capital can become tied up in completed stock sitting empty, part-exchange properties and other non-core assets sitting on balance sheets. That is capital which could otherwise be deployed into land acquisition, infrastructure investment and the delivery of future homes.
At a time when the government is seeking to accelerate housebuilding and increase housing supply, ensuring that developers can efficiently recycle capital should be recognised as part of the solution. Unlocking funds already trapped within businesses can help housebuilders maintain momentum, continue build programmes and invest in the next generation of developments.
Recent bulk transactions in the market demonstrate how this can work in practice. The sale by Vistry of a national portfolio of part exchange homes to Spring illustrates how developers are exploring alternative approaches to release capital from non-core assets and redirect it towards their core purpose: building new homes. Rather than being viewed solely through the lens of cashflow management, these transactions should also be recognised for the contribution they can make to sustaining housing delivery.
There is also an opportunity for policymakers to support these objectives more directly. Where bulk transactions facilitate the transfer of sitting homes from developers to specialist operators, consideration should be given to the role Stamp Duty Land Tax (SDLT) plays in restricting market liquidity. Reducing or removing SDLT on transactions that demonstrably recycle capital back into housing delivery could encourage greater participation and help ensure funds are reinvested into the construction of new homes. At a time when increasing housing supply remains a national priority, fiscal measures that support the efficient flow of capital through the housing market merit serious consideration.
The benefits extend beyond individual businesses. Greater liquidity within the market supports a more efficient housing system, helping to reduce barriers to moving home, improve transaction flows and support the delivery of much-needed housing stock. In an environment where developers are balancing the need to preserve cash with the need to continue building, access to flexible sources of liquidity – backed by the right policies – can have a positive impact across the wider market.
The challenges highlighted by individual developers recently are therefore not company-specific. They reflect wider structural pressures affecting the sector. Alongside planning reform, demand-side support and a review of tax measures that may inhibit market liquidity, industry leaders and policymakers should consider the role that innovative capital solutions can play in helping developers unlock balance sheet value, support housing supply and contribute to the government’s ambitious housebuilding targets.
The housing challenge will not be solved by any single intervention but by continuing to push for improvements across every part of the system.
