The number of new UK housebuilding businesses has fallen by a third since the end of the Help to Buy era. Higher borrowing costs and weaker demand continue to weigh on the sector.
Connells Group analysed Companies House data and found entrepreneurs launched 6,815 new housebuilding companies in the first seven months of 2026.
That was 3.5% fewer than during the same period last year. It was also 34% below the 10,387 recorded in 2022.
The 2022 peak coincided with the final year of Help to Buy in England. Relatively low interest rates also supported the market during part of that period.
Since then, fewer new housebuilding businesses have entered the market each year.
Help to Buy closed to new applicants in 2022. The scheme supported almost 400,000 home purchases after its introduction in 2013. First-time buyers accounted for most purchases.
Existing housebuilders have also faced increasing pressure.
More housebuilding businesses disappear
Companies House data shows 21% more housebuilding companies have dissolved since 2022.
The average lifespan of a housebuilding business stood at 7.1 years in 2020. It dropped to 6.3 years in 2023 before recovering to 6.8 years this year.
Connells suggested the market may have already lost many newer and more vulnerable businesses. As a result, established housebuilders now make up a greater proportion of the remaining firms.
At the end of July, the UK had 71,300 housebuilding businesses. The number peaked at more than 72,700 in May 2024.
Smaller developers under pressure
Higher interest rates, rising construction costs and slower property sales have put particular pressure on smaller developers. These businesses typically have less capacity to absorb delays and weaker sales.
Aneisha Beveridge, research director at Connells Group, said: “High interest rates, rising construction costs and weaker buyer confidence have increasingly deterred many new developers from entering the market.
“For a housebuilder brave enough to set up shop today, the operating environment remains far from easy. Until market conditions improve sufficiently, the number of housebuilders is likely to continue shrinking. This is compounded by an ageing workforce, which means many trade skills are being lost for good.
“Help to Buy’s epitaph is still being written, but it undoubtedly incentivised both existing housebuilders to build more homes, as well as enticing new developers into the market.
“While larger, established housebuilders have been better placed to absorb tougher conditions, newer players with less financial flexibility can’t afford to wait long for sales to roll in and have therefore struggled to make the numbers work.”
