How many new homes will England build in 2026/27?

Savills forecasts just 152,000 new homes in 2026/27 — barely more than half the government's 300,000 annual target. Over the five years to 2029/30, completions are expected to average 167,500 per year, well short of ministers' ambitions.

Why is England's housing delivery falling?

Savills identifies several converging pressures: planning consents and construction starts have thinned the development pipeline, affordability constraints limit buyer demand, higher interest rates make schemes harder to finance, and rising build costs (up 17.5% in four years) have outpaced house price growth (4.5% over the same period), squeezing developer margins.

What does falling housing delivery mean for property investors?

Lower supply of new homes strengthens the case for investing in existing stock, particularly in high-demand rental markets where the shortage of available housing supports rent growth and capital values. For landlords, less competition from new-build supply in rental hotspots protects yields. For developers, the planning bottleneck means sites with permission carry a premium.

Is the government's 300,000 homes target dead?

Effectively yes for the foreseeable future. Savills' forecast of an average 167,500 homes per year is barely half the target. The 300,000 figure was last achieved in 2019/20 — before the end of Help to Buy, before the mortgage rate shock of 2022-23, and before the Iran conflict pushed up construction costs. A return to that level looks unlikely before 2030 at the earliest.

Which regions will see the biggest shortfall in new homes?

Savills notes that development viability is the central obstacle across England, but the impact will be felt most acutely in high-cost southern regions where the gap between build costs and achievable sales prices is widest. The North and Midlands, where land costs are lower, are relatively better positioned, but still face significant headwinds from interest rates and planning delays.

England on Track for Just 152,000 New Homes in 2026/27 — Half the Government's Target

England will build just 152,000 new homes in 2026/27 — barely more than half the government's 300,000 annual target — according to a new Savills forecast published today. The research shows the UK housing market's supply crisis is set to deepen, with planning consents collapsing, construction starts down 31%, and build costs rising four times faster than house prices.

The forecast from Savills' residential research team estimates that across the five years to 2029/30, annual completions will average just 167,500 homes — a figure that is broadly in line with the 20-year average but well below what ministers say is needed to meet housing demand. Over the full period, just 837,500 homes are projected to be built against a notional target of 1.5 million.

For property investors, this data matters for two reasons. First, it confirms that the chronic undersupply of housing — the structural factor that has underpinned rental growth and capital values for decades — is not going away. Second, it creates specific opportunities and risks depending on what and where you invest.

What the Savills data shows

Emily Williams, Savills director of residential research, summarised the outlook bluntly: "Low levels of planning consents and starts mean a thinner pipeline of homes under construction, while affordability pressures, higher interest rates and rising development costs are constraining demand and viability. The result is that completions are likely to fall sharply in the short term."

The headline numbers are stark:

152,000 new homes forecast for 2026/27 — a 20% drop from the estimated 189,000 in 2025/26
167,500 average annual completions over five years to 2029/30
837,500 total homes across the five-year forecast period
31% decline in construction starts
16% drop in EPC certifications for new homes in three years to December 2025
4.1% fall in completions in the year to March 2025 (most recent actual data)
10.2% cumulative drop in two years since Help to Buy ended

The housebuilding industry is caught between rising costs and constrained demand. Build costs have surged 17.5% in four years to February 2026, while house prices have risen just 4.5% over the same period. That widening gap makes new schemes harder to justify on viability grounds, especially in areas where achievable sales prices are already under pressure from higher mortgage rates and stretched affordability.

The Help to Buy equity loan scheme, which closed to new applicants in October 2022, had been a significant driver of new-build demand — particularly for first-time buyers purchasing off-plan. Its removal has left a gap that the market has not yet filled, and Savills' data suggests the industry is still adjusting to that reality.

Planning pipeline: the bottleneck that will take years to clear

The planning system is acting as a structural constraint on housing delivery. Planning consents have fallen sharply, with the pipeline of approved but unstarted schemes running at multi-year lows. Savills identifies development viability as the single biggest obstacle, with higher interest rates making it harder for developers to finance land purchases and construction simultaneously.

The government's target of 300,000 homes per year has not been met since 2019/20, when Brexit stockpiling and strong demand briefly pushed completions above that level. Even the more recent delivery figures show a market running well below capacity. The 190,602 homes completed in the year to March 2025 represented a 4.1% decline, and Savills believes the worst is yet to come.

The Emily Williams quote cuts through: "There are encouraging signs at the start of the planning process, but it will take time for those improvements to feed through. In the meantime, boosting demand remains the clearest policy lever for lifting delivery." The subtext is clear: even if planning reform accelerates approvals, the lag between consent and completion means delivery will not improve for several years.

What this means for property investors

A persistent undersupply of new housing is, on balance, supportive for property investors — but the picture varies by strategy and region.

Rental investors benefit most. Fewer new homes mean less competition for tenants and continued upward pressure on rents. The chronic supply shortage in the private rented sector is the single strongest structural argument for buy-to-let investment, and Savills' forecast confirms that shortage is intensifying. Markets where rental demand is already strong — northern cities like Sunderland, Liverpool and Manchester — are best positioned to benefit.

Existing homeowners and landlords see capital values supported. Even in a period of price softening — we covered the 10% sales crash in June 2026 and the biggest June asking price fall in 14 years earlier this week — the structural undersupply of housing puts a floor under values. Markets that undersupply consistently do not crash; they correct and then flatline until demand catches up.

Developers and land investors face headwinds. If you are buying land for future development, be prepared for longer lead times and thinner margins. The planning bottleneck, rising build costs and constrained buyer demand all work against quick-turn development plays. Schemes that pencilled out at an 18-month timeline a year ago may now take 24-30 months to complete and sell.

Investors in existing stock have the edge. When new supply dries up, the value of well-located existing properties increases. This is particularly true in cities where planning constraints are tightest and land for new development is scarce. Our best UK cities for buy-to-let investment guide covers which locations combine supply constraints with strong tenant demand.

The political dimension

The Savills forecast lands at a politically sensitive moment. The Labour leadership contest and likely transition to an Andy Burnham premiership have put housing policy under the microscope. As we covered in our analysis of Burnham's potential impact on property investment, the incoming government will face intense pressure to deliver on housebuilding against a backdrop of constrained public finances and rising delivery costs.

Savills' research implies that the 1.5 million homes target set by the previous government — and inherited by the new administration — will be missed by a wide margin. The gap between political ambition and market reality is not new in UK housing policy, but it is widening. Any government that wants to close it will need to tackle planning reform, development viability and affordability simultaneously — a challenge that has defeated every administration for the last 50 years.

For investors, the key takeaway is straightforward: the UK's housing supply shortage is structural, not cyclical. It will persist through political cycles, interest rate changes and economic shocks. A buy-to-let property bought at a genuine discount in a location with strong rental demand benefits from that scarcity regardless of what the headline delivery numbers say. The details of each deal still matter — more than ever in a market where transaction volumes are falling and exit timelines are stretching — but the macro backdrop remains supportive for patient capital deployed well.

Key takeaways for investors

Supply crisis intact: Savills forecasts just 152,000 new homes in 2026/27 against a 300,000 annual target — a 49% shortfall.
Build costs outpace prices: Construction costs up 17.5% vs house prices up 4.5% in four years — squeezing developer margins.
Planning bottleneck: Construction starts down 31%, EPC certifications for new homes down 16%. Recovery will take years.
Rental demand supported: Fewer new homes means less competition for tenants — positive for buy-to-let yields.
Existing stock wins: When new supply dries up, the premium on well-located existing properties increases.

The Savills data is a reminder that the UK's housing problem is not going anywhere. For investors who buy right, the supply-demand imbalance that frustrates policymakers is the same force that supports rental income and long-term capital values. The trick is buying at the right price — and that discipline matters more when the market is soft than when it is rising. Our strategies section has the frameworks you need to source and underwrite deals in exactly this kind of environment.