More than 60% of property developers expected there to be an increase in housebuilding in the short term, according to a survey by Shawbrook. However, confidence dipped when respondents were asked about the medium- and long-term outlooks of 1-3 years and 3-5 years, with just over 50% predicting growth over these timescales.
In the last year, the government has introduced several measures to accelerate housebuilding. These include planning reforms such as mandatory housebuilding targets for councils, grey belt policies, the recruitment of 300 new planning officers, and golden rules for development.
According to Shawbrook’s findings, these initiatives are boosting confidence among property developers.
The bank said this optimism may stem from the government’s target to build one-and-a-half million homes over the next five years.
When asked about the likelihood of achieving this goal, 59% of developers believed it would be easy, while 41% acknowledged it could be challenging.
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Barriers to housing delivery
This sentiment follows the release of the S&P Global UK Construction PMI figures, which recorded the sharpest decline in construction output since May 2020, driven by weak demand and broader economic concerns.
A third of developers pointed to the lack of support for first-time buyers as a major barrier to homeownership, while an equal proportion felt the UK’s infrastructure – such as roads, railways, schools, and hospitals – was insufficient to support new developments.
Resource availability is another key concern among developers. Almost 30% believe there isn’t enough funding to support developers, while 28% feel there is insufficient land in high-demand areas. An equal proportion are worried that there aren’t enough resources to meet the level of building required.
Government must go further to meet housebuilding target
Terry Woodley, managing director of development finance at Shawbrook, said: “While the developers we spoke to are confident, scepticism remains more broadly in the market.
“There has been some progress over the past year in reducing planning red tape and streamlining processes, but more needs to be done to make the 1.5 million new home[s] target feel more achievable.
“Resource constraints remain a major challenge – whether in the form of materials and supply chain issues or the sector’s ongoing skills shortage. To truly unlock the UK’s housebuilding potential, the government should make addressing these issues a priority.”
