Pipeline Under Pressure

Knight Frank examines the UK’s housing supply pipeline in light of the Spending Review, which identified the housing shortage as one of the biggest barriers to growth. Recent measures include a £39 billion ten-year Affordable Homes Programme and a new National Housing Bank with £16 billion of financial capacity, alongside the December changes to the National Planning Policy Framework.

Despite these steps, supply remains under strain. The first government figures since the NPPF reforms show new home permissions fell a further 3% year on year to 234,945, and full planning consents are down 30% from their 2021 peak, meaning completions will stay low in the near term. London accounted for 19% of residential consents, the highest share of any region, but also faces the greatest obstacles, including Gateway 2 delays, rising build costs, planning bottlenecks, stricter affordable housing requirements, weak demand for Section 106 homes and viability reviews.

Knight Frank’s survey for its upcoming Q2 Land and Development Report found 45% of housebuilders plan to submit more applications over the next year, though reforms will take time to feed through. New homes made up just 8.2% of listings in May, against a pre-pandemic average above 10%.

There are some signs of recovery: over a fifth of developers expect new home sales to rise in the second half, and 54% see lower mortgage costs as key. Lending at 90% loan-to-value or above hit a 17-year high in Q1, and Bellway raised its sales guidance to 8,600–8,700 homes.

Labour is a growing concern. More than 80% of respondents are worried about construction employment, and 40% have missed build targets due to workforce shortages, with bricklayers most in demand. Knight Frank expects tight supply to continue supporting prices.

Source: Knight Frank Newcastle, original article (3 July 2025)