According to Savills, although planning reforms will lead to an increase in the supply of consented land, this will not result in higher completions.
The firm predicted that subdued demand for housing would lead to just 840,000 new homes, just over half the government’s target.
Savills said this was because demand for new homes was low and developers would only build if there was enough appetite.
New home completions fell by 6.5% in the year to March 2024 to 198,000 homes, which the firm said was expected after the end of the Help to Buy scheme the year before. It has predicted that for the 2024/25 year, completions will fall further to 180,700. This has been based on Energy Performance Certificate (EPC) rating data.
Savills said a new scheme could help demand recover to the levels seen while Help to Buy was available.
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It said grant-funded affordable housing was the quickest way to increase the delivery of housing, but added that this was impacted by limited financial capacity in the housing association sector.
Savills also noted limitations to the speed at which housing could be developed, saying that even with more funding, there were constraints in the workforce and supply chain.
Dan Hill, associate and research analyst at Savills, said: “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.”
