New research from Shawbrook found that 59% of property developers surveyed within the UK believed it would be easy to reach the government’s target to build 1.5m homes over the next five years. Meanwhile, 41% acknowledged it could be challenging.
This comes against the backdrop of recent 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.
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.
Analysis of the data revealed 64% of developers expect housebuilding to increase in the short term, within 12 months. However, confidence dips in the medium term, one to three years, with 51% anticipating growth, and remains similar in the long term, three to five years, at 52%.
A total of 33% 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. Nearly a third, 29%, believe there isn’t enough funding to support developers, while 28% feel there is insufficient land in high-demand areas. An equal proportion, 28%, are worried that there aren’t enough resources to meet the level of building required.
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 1.5m new home 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.”
