Planning reforms such as mandatory housebuilding targets for councils, grey belt policies, the recruitment of 300 new planning officers, and ‘golden rules’for development have boosted developers’ confidence that the Government will hit its 1.5m new homes target, says Shawbrook MD Terry Woodley (pictured).

Increase in housebuilding

Analysis of the lender’s survey data reveals that two-thirds (64%) of developers expect housebuilding to increase in the short term (within 12 months). However, confidence dips in the medium term (1–3 years), with just over half (51%) anticipating growth, and remains similar in the long term (3–5 years) at 52%.

This optimism, says Woodley, stems from the new Government’s target to build 1.5 million homes over the next five years. When asked about the likelihood of achieving this goal, three in five (59%) developers believed it would be easy, while 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.

A third (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.

While the developers we spoke to are confident, scepticism remains.”

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, commented: “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 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.'”