Latest data confirms housebuilding slump

Achieving the 1.5 million new homes target will be made all the more challenging because the latest quarterly figures from the National House Building Council (NHBC) show housebuilding has slumped by 23% compared with the same quarter a year ago. Some major housebuilders have also warned that they expect to reduce housebuilding over the next 12 months.

NHBC released its quarterly report on new homes registration data in July. NHBC is the leading provider of new home warranties, covering more than 70% of the UK market. Registration of new homes is a key forward indicator of housebuilding activity.

The NHBC figures showed a year on year quarterly fall of 23%. Even more concerning, as the chart below shows, is that new homes registrations have been falling since 2022. NHBC themselves commented that there is a "mountain to climb" to reach the 300,000 a year target, and that new registrations need to more than double the numbers currently available if the target is to be met.

Figure 1 NHBC

The NHBC figures are far from the only indicator of the housebuilding slump. Official MHCLG numbers show that annual housing starts for 2023/24 were the lowest for a decade.

This situation does not look set to change in the near future. In recent weeks major housebuilders, Barratt and Taylor Wimpey, confirmed that they were expecting to reduce or broadly maintain overall housing output over the next few months, highlighting the continuing challenges facing the housebuilding industry.

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