Britain’s major housebuilders are entering the next phase of the market with one foot on the brake, raising fresh doubts over whether the government can get anywhere near its ambition of delivering 1.5 million homes in England during this Parliament.
The clearest warning has come from Barratt Redrow, the country’s largest housebuilder, which has cut its expected land approvals for the financial year from 10,000–12,000 plots to 7,000–9,000. In its latest trading update, the group said it was becoming “even more selective” because of a less certain backdrop, including geopolitical events, mortgage-rate risk and potential build-cost inflation. Its completions guidance for the current financial year remains unchanged at 17,200–17,800 homes, but the reduced land buying matters because it points to a more cautious pipeline beyond 2026.
Berkeley, one of London and the South East’s most important residential developers, has gone further. It has said it will stop buying new land and freeze hiring, blaming weak demand, high costs, regulatory pressure and uncertainty over interest rates. That is particularly significant for London, where high-rise and regeneration schemes are already being squeezed by building-safety requirements, expensive finance and soft buyer confidence. Reporting on Berkeley’s position noted that new private homes starting construction in London in the first nine months of 2025 totalled just 3,248 — less than 5% of the capital’s forthcoming annual target of 88,000 homes.
The wider picture is not one of total collapse, but nor is it a recovery strong enough to meet political promises. Government data show 208,600 net additional dwellings in England in 2024–25, down 6% on the previous year and far below the roughly 300,000 homes a year needed to meet the 1.5 million target. New-build completions in the final quarter of 2025 were 41,570, up 2% year-on-year, but that quarterly improvement does not yet change the broader story of subdued delivery.
The problem is demand as much as supply. Higher mortgage rates have made new homes harder to afford, especially for first-time buyers, while the end of Help to Buy removed a major support for new-build sales. Savills has reported that new-build sales rates in England fell from about 0.5 sales per outlet per week at the end of 2024 to 0.3 in the three months to August 2025 — weaker than the rate reported by major housebuilders after the 2008–09 financial crisis.
Taylor Wimpey has also warned of softer conditions, with Reuters reporting that the group expected lower 2026 margins amid muted demand and weaker pricing in parts of its order book. Vistry, which is more focused on partnerships and affordable housing, expects growth in 2026, but has still faced margin pressure and a sharp market reaction to its results. Persimmon is one of the more positive exceptions, forecasting higher completions and profit in 2026, helped by improving sales and its vertically integrated model.
For house prices, the likely effect is complicated. Fewer homes being built should, in theory, support prices over the medium term by restricting supply. But that does not automatically mean strong price growth in the short term. If buyers remain constrained by mortgage costs and weak confidence, developers may need to use incentives, bulk deals or slower build-out rates rather than push prices higher. The result could be a market where supply is too low to solve the housing shortage, but demand is too stretched to allow a clean recovery.
For renters, the outlook is more worrying. A weaker new-build pipeline means fewer homes entering the system in future years, adding pressure to a rental market that is already short of supply in many parts of the country. In London, where private-sale apartment schemes often cross-subsidise affordable housing, stalled development can also mean fewer affordable homes delivered through planning agreements.
The government has tried to respond through planning reform, changes to London viability rules and promises to train more construction workers. But industry analysts argue that planning alone cannot solve the problem if buyers cannot afford the homes, developers cannot make sites viable, and housing associations lack the financial capacity to pick up the slack. The Joseph Rowntree Foundation has warned that weak demand, high interest rates and rising costs mean the 1.5 million homes target is likely to be missed without additional action to increase the capacity of councils and housing associations.
The risk now is a delayed supply shock. Today’s lower land buying and paused starts will not be fully visible in completion numbers immediately, because large builders are still finishing homes already under construction. But by 2027 and 2028, the effect could become clearer: fewer outlets, fewer completions and a bigger gap between political ambition and what the market is actually delivering.
For the construction sector, the message is equally stark. If major housebuilders slow land buying, contractors, subcontractors and materials suppliers face a thinner pipeline. For government, it means the housing target increasingly depends not just on reforming planning, but on restoring confidence across the entire delivery chain. Without cheaper finance, stronger buyer demand and more public-sector capacity, Britain may find that permissions alone do not build homes.