Interest rate cuts, stronger-than-expected house price growth and pro-house building Government policy have renewed house builders appetite for expansion, a leading estate agency has claimed.

Knight Frank’s latest Land Index & Housebuilder Survey found that 60% of both large and small house builders were the most active group in the land market within their region during the final quarter of 2024. That is a two-year high for the quarter and is up from a third in the same period in 2023.

A fifth of those surveyed said that offering incentives had helped to support sales last year. Over half were also offering price discounts, and another 50% were offering non-cash items such as carpets and white goods and the same proportion contributed to legal fees and stamp duty.

Conditions improving

With further rate cuts likely as the Bank of England contends with signs of a stagnating economy, developers are expecting conditions to continue improving in 2025.

And to add to their growing sense of optimism, recent changes to planning policy are now starting to have a tangible impact. Last year the government set out proposals in the National Planning Policy Framework (NPPF) to reinstate mandatory housing targets, ease greenbelt restrictions, and support economic growth through infrastructure development.

Housebuilders are entering 2025 with a little more optimism compared to this time last year.”

As a result, the proportion of housebuilders citing planning delays as their primary business pressure has fallen to 70%—the lowest level in over three years.

Knight Frank’s Charlie Hart (main image), says: “We’re seeing encouraging signs in the land market, housebuilders are entering 2025 with a little more optimism compared to this time last year. It’s great to see local authorities take a more proactive approach to site assessments and housing allocations.”