Housebuilder start-ups hit four-year low amid tougher property market
High interest rates and the end of Help to Buy have hindered housebuilder start-ups, says Connells' Aneisha Beveridge.
The number of housebuilding companies being set up in Britain has fallen to its lowest level since its 2022 peak.
The decline has been blamed on the end of both low interest rates and the Help to Buy scheme in England.
The analysis of Companies House data by Connells Group shows that across the first seven months of 2026, 6,815 new housebuilders were set up, down from a peak of 10,387 in 2022.
During the same period, the number of housebuilding companies falling into administration increased by 21%.
Until market conditions improve sufficiently, the number of housebuilders is likely to continue shrinking.”
Meanwhile, the average life expectancy of a housebuilding company fell from 7.1 years in 2020 to 6.8 years so far in 2026.
There are a total of 71,300 housebuilders in business across Britain, down from a peak of just over 72,700 in May 2024, Connells says.
Introduced in April 2013, the scheme gave just under 400,000 mostly first-time buyers access to Government-backed equity loans on new homes worth between 20%-40% of a property’s value.
Since the scheme closed to new applicants in 2022, the number of new housebuilders being established has fallen in every year since.
Meanwhile, higher interest rates mean it can cost more for developers to build and for buyers to borrow.
Shrinking sector
Aneisha Beveridge (pictured), Research Director at Connells Group, says: “High interest rates, rising construction costs and weaker buyer confidence have increasingly deterred many new developers from entering the market.
“For a housebuilder brave enough to set up shop today, the operating environment remains far from easy. Until market conditions improve sufficiently, the number of housebuilders is likely to continue shrinking. This is compounded by an ageing workforce, which means many trade skills are being lost for good.
“Help to Buy’s epitaph is still being written, but it undoubtedly incentivised both existing housebuilders to build more homes, as well as enticing new developers into the market.
“While larger, established housebuilders have been better placed to absorb tougher conditions, newer players with less financial flexibility can’t afford to wait long for sales to roll in and have therefore struggled to make the numbers work.”
