New homes completions dropped by 6.5% in the year to March 2024 to 198,600 homes, a decline which was widely anticipated following the end of the Help to Buy scheme in March 2023. For the 2024/25 year, Savills estimates that completions dropped further still to 180,700 completed homes, based on EPC data.

Dan Hill, Savills research team, commented: “Based on current policy and trends, housing completions are likely to remain low, between 160,000 and 170,000 per year over the next few years. While it is possible to exceed this, demand support would be needed. Even with this, delivery will be constrained by the speed at which the housebuilding sector can expand its supply chains and labour force. This means completions are still likely to fall short of the Government’s target. At most, we think very significant demand support could push completions to 1.2 million new homes by March 2029.”

According to Savills, the number of unsupported market sales will average around 100,000 per year, accounting for roughly 10% of all housing transactions, a level that has remained largely unchanged over the past 50 years.

The Help to Buy scheme significantly boosted demand for new homes over the last decade, enabling sales to exceed this long-standing average. A new support scheme would be needed to achieve the same levels again and continue to help first time buyers access homeownership.

Build to Rent has formed a growing portion of completions over the last five years, reaching a record of 18,100 in 2023/24. Interest in the sector remains, although higher interest rates present a challenge. Starts have fallen by -59% from a peak of 25,700 in the year to October 2022 to 10,600 in the year to March 2025, the beginning of this fall correlating with a spike in interest rates and the Liz Truss Mini-Budget. This decline is expected to impact completions over the next few years until the cost of debt eases.

Grant-funded affordable housing is the easiest route to quickly increasing housing delivery. However, this delivery is currently challenged by the limited financial capacity available within the Housing Association (HA) sector.

Due to increased spending requirements on existing stock, alongside falls in real rental income and higher build costs, HAs are limited in the extent to which they can invest in new homes. As a result, affordable starts fell by -39% in the year to March 2024, including an -88% decline in London. The drop in starts will likely result in fewer completions. According to the latest Global Accounts data from the Regulator of Social Housing, RPs predict delivery will be 12% lower over the next five years than they did the previous year.

Recent planning reform has reduced a key barrier to increasing the supply of new homes, but further measures are required, focusing on increasing demand.

While the government has shied away from questions around reintroducing the Help to Buy scheme, house builders are increasingly calling for support. A scheme of similar scale to Help to Buy would generate an increase in new homes sales, and therefore in new homes completions, in the tens of thousands per year. And a large increase in grant funding could also enable HAs to take on more homes.

Even with funding allocated to new homes, Savills highlights that there are limits to the speed at which housing completions can expand, due to workforce and supply chain constraints. Over the last 50 years, in years when housebuilding has been growing, the average rate of expansion has been 7.7% per year. When supported by the Help to Build scheme, the rate of expansion in the mid-2010s was 10.8% in 2013 and around 15.7% in both 2014 and 2016.

If housebuilding capacity were to match this peak rate of 15.7% per year for the next four years, we could see an additional 350,000 homes completed by 2028/29. This would mean total delivery of c.1.2 million over the five year period, still short of the 1.5 million homes target. But this would rely on large scale demand support being put in place.