England Housing Supply Down Approximately 25,000 Homes

Savills have reported that England witnessed a decrease of approximately 25,000 new homes in the past year compared to the previous year. This decline in new home construction raises concerns about supply and demand:

• The availability of new homes in England continues to be a concern, with only 239,300 new homes completed in the twelve-month period leading up to June 2023, as reported by Energy Performance Certificate (EPC) data.

• There is a possibility of further decline in the rolling annual total in the upcoming months. Only 110,600 new homes were completed in the first half of 2023, and this six-month figure is the lowest since 2017, when excluding the influence of the pandemic.

• This indicates the government's annual goal of 300,000 new homes per year will be missed, at least for the foreseeable future.

A significant contributing factor to this situation has been the persistent uncertainty surrounding planning policy. The Levelling Up and Regeneration Bill, set to introduce revisions to the National Planning Policy Framework (NPPF), has encountered delays and will not return to Parliament for the review of amendments until the Autumn. Furthermore, local planning procedures have also slowed down. Over the past ten years, an average of twenty-seven local plans were adopted annually; however, by the midpoint of 2023, only eight plans have been adopted, which is less than half the anticipated number.

On the other hand, the BTR sector shows signs of improvement. Whilst the commencement of Build-to-Rent projects has decreased, the pace of this reduction has moderated. Completions are once again increasing, driven by robust rental growth and heightened investment within the sector. Additionally, the number of new affordable homes looks set to come in at the second highest in eight years, with an estimated 26% rise in the number of social rent homes being built.

However, overall, new home availability continues to fall short of housing demand in the majority of England, with the Southeast region experiencing particularly notable effects.