Britain lost over 1,500 homebuilders in past year on weak demand
The deterioration has also been driven by a planning system that’s fallen into dysfunction over the past decade after years of austerity stifled development
[LONDON] The number of housebuilders in Britain is in decline for the first time in a decade, as a slump in demand threatens to derail the government’s plan to build 1.5 million homes.
The number of homebuilders trading in Britain fell by more than 1,500, or 1.7 per cent, in the year to September, the first annual decline in at least a decade, according to data from broker Hamptons. Some 1,904 developers were either in administration or in the process of being wound up over the same period, a 5 per cent year-on-year increase that’s 63 per cent higher than in September 2022.
The data capture businesses registered as housebuilders that are listed as actively trading on Companies House, meaning some are subsidiaries of larger developers.
“Businesses are struggling to maintain momentum in a post-Help to Buy world,” Hamptons’ lead analyst David Fell said, referring to a now-defunct, state-backed stimulus programme. “Rising mortgage rates and construction prices have dampened demand,” while weaker house prices in southern England have made it harder to turn a profit, he added.
“Help to Buy” was introduced in 2013 as the flagship housing policy of former Conservative Prime Minister David Cameron, extending initially interest-free loans to buyers with a 5 per cent down payment, topping up their deposits to the 25 per cent typically required by lenders. The policy, which came to an end a decade later, turbocharged sales for the country’s largest homebuilders while allowing thousands of people to get access to new homes.
The phasing out of the programme coincided with the end of the ultra-low interest rate era, squeezing the purchasing power of prospective buyers and significantly slowing sales of new homes. Builders in turn have responded by dramatically scaling back their output, ramping up pressure on a government that’s pledged to radically increase house building to the highest in decades.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
Barratt Redrow and Persimmon, two of the UK’s largest developers, said on Monday (Oct 13) that they were launching their own versions of “Help to Buy” in a bid to boost sales. Bloomberg News reported last month that Vistry Group was also working on plans to launch their own equity loan product.
Hamptons said that 71 per cent of housebuilders going out of business this year had been set up during the “Help to Buy” era, suggesting many were unable to adapt to the end of the programme. The average life expectancy of a housing developer has fallen to 9.8 years in 2025 from a peak of almost 13 years in 2016, according to the report.
The deterioration has also been driven by a planning system that’s fallen into dysfunction over the past decade after years of austerity stifled development. More recently, delays in regulatory checks introduced after 72 people died in the Grenfell Tower fire have pushed some smaller developers to the brink of collapse.
SEE ALSO
At the same time, regulatory burdens and environmental and safety rules that have grown increasingly complex have gradually tilted the market in favour of larger homebuilders, with the share of homes completed by the biggest developers on a near consistent upward trend.
“This arithmetic has squeezed some housebuilders beyond breaking point, pushing the government’s housing target further out of reach,” Hamptons’ Fell said. “It’s a high-stakes game, and right now, the odds are stacked against many smaller builders.”
Still, the ruling Labour Party pledged on Tuesday to accelerate stalled infrastructure projects by cutting the amount of time it takes for a judicial review to move through the court system by about half a year. Housing Secretary Steve Reed said that the move would help to get “Britain building again”. BLOOMBERG
Share with us your feedback on BT's products and services
