Annual housing supply in England fell 6% to an eight-year low of 221,071 net additional dwellings in the 12 months to the end of March 2024, according to the latest government data.

All England regions bar one saw a drop in net additions over this period. The North East, South West and East Midlands have all seen the sharpest falls in annual delivery. In London, output fell 9% to 32,162, a nine-year low.

Looking ahead, the capital and the South East face the biggest shortfalls compared to Labour’s proposed 370,000 annual target for England.

Data for 2024 so far shows that housing delivery in England, using EPCs as a proxy for completions, is down 7% versus 2023 and 14% compared with 2022.

Anna Ward, Knight Frank’s associate in residential development research, said: “These declines reflect the mounting challenges to boosting delivery, including construction capacity constraints and economic pressures stemming from market volatility. 

“Addressing this shortfall requires empowering entrepreneurial developers in urban centres as well as traditional greenfield builders.”

Charlie Hart, head of development land at Knight Frank, said: “The decline in London and the South East highlights the pressing need for bold policy reform.

“While the UK housing market presents significant opportunities, particularly in our cities, we need to create conditions that attract global investment and support entrepreneurial developers.

“SME developers, who are vital to urban regeneration, have demonstrated their willingness to drive innovative solutions when operating within a supportive framework. 

“Creating a more competitive investment environment would help unlock the potential of our cities and boost housing delivery to meet growing demand.” 

Hart added: “Looking ahead, policy changes that incentivise development and welcome global capital could transform our urban landscapes and help address housing shortages.”