With an amplified government focus on bolstering housing supply, the recent New Homes Week 2025, and a busy start to the year across the housing and mortgage markets, now is the perfect time to shine a spotlight on an ever-evolving new-build sector.
Shaped by government policies, economic conditions and buyer demand, this market continues to progress, with lender innovation and industry collaboration playing a crucial role in improving homeownership availability and accessibility.
According to the Construction Products Association, construction output is projected to grow by 2.1% in 2025, and rise to 4% in 2026, signalling a gradual recovery from recent economic pressures, particularly in the private housing sector.
Building control data from the Housing supply: indicators of new supply, England: July to September 2024 report, produced by the Ministry of Housing, Communities and Local Government, also points to a positive trajectory, with 29,310 dwellings started between July and September 2024. This represents a 17% increase on the previous quarter and a 38% rise compared to the same period last year.
Balancing supply and demand
Although challenges remain evident, planning constraints continue to be a major obstacle in expanding the supply of new housing. However, there may be light at the end of the tunnel. From unblocking stalled sites to setting achievable local targets, changes to planning regulations could provide much-needed relief.
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The revised National Planning Policy Framework aims to address some of these challenges by reducing delays, enhancing infrastructure capacity, and improving local authority efficiency. Additional staffing and streamlined processes at local planning offices will also prove essential in effectively meeting any new housing targets.
Despite supply being an ongoing concern, ensuring consistent demand is equally critical. Affordability remains a key issue for prospective homeowners, with financial confidence heavily influencing purchasing decisions. As we’ve seen historically, when demand significantly outpaces supply, house prices surge, impacting affordability.
Therefore, it’s vital that any support measures must be introduced at the right time, in the right form, with the right level of due diligence undertaken to maintain a stable market.
Innovation in housing and mortgage products
With the Help to Buy scheme no longer dominating the market, innovation is now at the forefront of efforts to support homebuyers. Lenders and developers alike are introducing new products and initiatives to improve accessibility.
Shared ownership, Deposit Unlock, and lender-led schemes are helping more first-time buyers onto the property ladder. The introduction of more energy-efficient mortgage products also aligns with the growing consumer demand for sustainable homes.
In addition, the Future Homes Standard (FHS), which will impact new-build regulations, remains a crucial consideration for housebuilders. While the consultation closed in March 2023, a change in government raises questions about how the FHS will be implemented. Nonetheless, many developers are already prioritising energy efficiency, recognising that a large number of buyers see it as a significant factor in their home buying decisions. And further consumer education on the long-term cost and environmental benefits of new builds compared to retrofitting older properties will be essential in driving demand.
A positive outlook for the new-build sector
Speaking with homebuilders across the UK, there is a strong sense of optimism. A sustained focus on supply, affordable housing initiatives, and lender innovation will inevitably play vital roles in driving the new-build sector forward.
Moreover, it feels like there is greater alignment from the government down, which will help streamline planning processes, support affordability measures, and encourage further investment in housing development. While planning reforms and economic conditions will shape progress, the industry’s commitment to innovation and sustainability positions it well for future growth.
As we progress through 2025, the intermediary market will play a crucial role in guiding a diverse range of buyers through what can often feel like a complex landscape, ensuring they have access to the right products and support to achieve their homeownership dreams.
And the easier and more transparent this journey becomes, the better it is for every link in the new-build chain.
