Current levels of housing supply in England will not be enough to meet the government's ambitions 1.5m new homes pledge, Savills warns.
And the government's own data underlines the scale of the potential shortfall.
Savills says that housing delivery will average only 167,500 homes per year over the next five years to 2030, and will plummet to just 152,000 in 2026/27, which is barely half the government's 300,000 annual target.
New build numbers to fall
The property consultancy's director of residential research, Emily Williams, 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.”
She added: "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."
Site starts are falling
The slowdown is already showing up in the official figures.
Housing completions fell 4.1% to 190,602 in the year to March 2025, leaving output 10.2% below the level recorded when Help to Buy came to an end.
Building control data for 2025-26 points to the same pressure. Starts rose 15% to 130,170, but completions slipped to 143,110, the lowest total since 2015-16.
There was a short-lived improvement in Q1 2026, when 37,170 homes were completed, up 3% year-on-year. Savills, however, cautions that the rebound is unlikely to last.
The larger concern is the shrinking development pipeline. Planning consents have fallen 39% over three years to 180,000, while starts are down 31%.
Another big issue is that build costs have jumped 17.5% in four years, but house prices only rose 4.5%.
Rising costs hurt developers
The gap in building costs and house values means that developers face a gulf between spiralling overheads and stalled house price growth.
That's aside from affordability pressures and higher interest rates which have dampened demand.
There are signs of movement in the planning system as residential planning applications jumped 44% in the past year, returning to 2022-23 levels.
Savills warns it will take at least 18 months for these early improvements to feed into actual completions on site.
BTR is also falling
The firm's data shows that private unsupported sales will average 102,700 homes annually to 2029/30, down from 107,500.
Build to Rent is forecast to average 14,500 per year, against 15,500 previously.
Grant-funded affordable housing is expected to average 29,200 homes a year, while Section 106 contributions are forecast to fall to 21,000 — down 19% on the previous five-year period.
In total, Savills expects 837,500 homes to be delivered across the five years.
Nowhere near government target
Those fears are supported by the government's own figures which were published after the Savills report.
Since Parliament opened on 9 July 2024, just 392,400 net additional homes have been delivered, based on EPC registrations.
Dr David Crosthwaite, chief economist at the Building Cost Information Service, said this represents 'roughly two-thirds of the pace required to hit the target' of 1.5 million homes.
To close the gap, the sector would need to deliver around 361,000 homes annually for the remaining period which is 'well above anything achieved in modern times'.
A buyer support scheme could support 85,000 completions by March 2029 and 120,000 within Savills' forecast window, of which 92,000 would be additional supply.
Under that scenario, completions could reach 198,000 homes per year by 2028/29.
Landlords need support
Simon Thompson, the managing director of Accommodation for Students, said: "There's no doubt that housing shortages will intensify competitive advantages for landlords.
"The delays and cost of new developments also adds pressures and with fewer landlords investing means yields will be protected."
He added: "It was always an ambitious target for the government but with a growing population means that the private rented sector should be supported.
"As a vital source of quality housing, private landlords need a reason to invest in homes to help meet demand."
