Can the government still hit its housing target?

England is set to fall well short of the government’s target of delivering 300,000 new homes a year, with new housebuilding expected to average just 167,500 completions annually over the next five years, according to new forecasts from Savills.

The property consultancy predicts that just 837,500 homes will be completed across England by 2029/30, as a shrinking development pipeline and ongoing affordability pressures continue to weigh on housing delivery.

New homes completions fell 4.1% to 190,602 in the year to March 2025, extending the decline since the end of Help to Buy. Savills estimates around 189,000 homes were built in 2025/26 but expects output to drop to little more than 150,000 homes a year in both 2026/27 and 2027/28.

The report points to a sharp contraction in development activity, with annual planning consents down 39% over the past three years to around 180,000 in 2025. Housing starts have fallen 31% over the same period, while EPC registrations for new homes are down 16%.

Affordability constraints and weakening development viability are also limiting supply. Savills notes that build costs have risen 17.5% since February 2022, while house prices have increased by just 4.5%, squeezing margins and making many schemes harder to deliver.

While the short-term outlook remains challenging, Savills said there are signs that planning reforms are beginning to have an impact. Residential planning applications rose 44% over the past year, while appeal success rates have improved. However, the consultancy cautioned that it could take at least 18 months before any improvement feeds through into higher completion volumes.

Emily Williams, director, residential research at Savills, said: “England’s housing delivery has proven to be reasonably resilient in the face of recent economic headwinds, but the underlying picture is becoming increasingly challenging. Low levels of planning consents and starts mean a thinner pipeline of homes under construction, while affordability pressures, higher interest rates and rising development costs are constraining demand and viability. The result is that completions are likely to fall sharply in the short term, with our forecast pointing to just 152,000 new homes in 2026/27. There are encouraging signs at the start of the planning process, but it will take time for those improvements to feed through. In the meantime, boosting demand remains the clearest policy lever for lifting delivery.”

“The analysis also highlights shifts in delivery by tenure. Savills expects unsupported private sales to average 102,700 a year over the five years to 2029/30, down from 107,500 over the previous five years, while Build to Rent completions are forecast to average 14,500 a year, compared with 15,500 previously. Grant-funded affordable housing is forecast to average 29,200 homes a year, and Section 106 affordable housing 21,000 homes a year – 19% lower than the previous five years.

“Savills also says a buyer support scheme could materially improve delivery. If introduced now, a new scheme could support 85,000 completions by the Government’s March 2029 deadline for their 1.5 million home target, and 120,000 within the report’s forecast window, with 92,000 of those homes estimated to be additional.

“Under that scenario, completions could rise to 198,000 homes per year by 2028/29 which, though still below the Government’s target, would be enough to maintain housebuilding at the average rate seen over the last decade despite current headwinds.”