Home » Are different parts of the residential construction sector diagnosing different ailments?

Are different parts of the residential construction sector diagnosing different ailments?

Published: 17/06/2026

Housing delivery sits at the heart of the government’s agenda for this Parliament, with a flagship target of delivering 1.5 million net additional homes. Yet recent statements from the government, local authorities, housebuilders and the House Builders Federation reveal differing views on the factors that are constraining development and influencing delivery decisions.

At first glance, these perspectives can appear contradictory but, in practice, they illustrate the complexity of project delivery, where organisations with different roles, objectives and accountabilities must navigate a range of economic, regulatory and market factors that influence outcomes.

What does the government think is the key constraint to increasing housing delivery?

Government policy has placed significant emphasis on planning reform as a way of increasing housing supply.

Speaking at UKREiiF in May⁽¹⁾, Housing and Planning Minister Matthew Pennycook highlighted reforms to housing targets, strategic planning, planning committees and local plan coverage as key measures to increase housing delivery.

At the same time, he acknowledged the challenging market conditions facing the sector, including rising interest rates, higher building materials costs, weaker buyer demand and geopolitical uncertainty. Alongside planning reform, he pointed to initiatives such as the New Homes Accelerator, the National Housing Bank, additional affordable housing investment, Building Safety Regulator reform and support through Homes England as measures intended to help unlock development and support delivery.

Do local authorities see the same problem?

Local authorities place particular emphasis on planning capacity and resources. A recent survey of more than 200 council figures⁽²⁾, including chief executives, directors, heads of service and councillors, found that councils believe greater planning powers, additional planning department resources and stronger strategic planning would have the greatest impact on housing delivery.

Tellingly, no respondents to the Confidence Survey said they thought the national target of 1.5 million new homes by the end of this Parliament was achievable.

While councils have an understandable focus on ensuring they have the capability and flexibility required to operate the planning system effectively, major housebuilders, meanwhile, paint a different picture.

Are housebuilders facing a different set of constraints?

Recent trading updates from listed housebuilders⁽³⁾, including Persimmon, Barratt Redrow, Taylor Wimpey, Bellway, Berkeley, Vistry and Crest Nicholson, contain repeated references to affordability pressures, consumer confidence, cost inflation, balance sheet management and capital discipline. Planning continues to feature in discussions about future delivery, but many of the operational and financial updates are about market conditions and investment decisions.

Some builders have adopted a more selective approach to land acquisition while maintaining substantial land banks. Others have cited softer enquiries, pressure on pricing and concerns about renewed building cost inflation. Many are prioritising cash generation and investment discipline while assessing the uncertain economic outlook.

Is viability becoming the defining issue?

The Home Builders Federation (HBF) has sought to quantify some of these concerns. Its Viability Crunch⁽⁵⁾ report argues that the combined impact of inflation, regulation, taxation and policy requirements has materially increased development costs in recent years. This cumulative effect, rather than any individual requirement, continues to be a key influence on delivery, and is particularly hard-hitting for smaller housebuilder firms.

Taken together, these perspectives suggest that planning reform forms just one part of a far wider housing delivery equation. Planning permission can create the opportunity to build, but actual development activity is determined by economic conditions, project viability, funding availability and market demand.

Does location change the diagnosis?

While many national housebuilders have adopted a cautious tone, Springfield Properties’ latest trading update⁽⁴⁾ highlights why a national picture does not always reflect local market conditions. Against a backdrop of major energy and infrastructure investment in the north of Scotland, the company said it expects housing demand linked to grid upgrades, renewable energy projects and wider energy security investment to drive house price growth and help offset cost pressures associated with the conflict in the Middle East.

Viability, therefore, is not necessarily fixed across the UK. The same cost pressures, regulatory requirements and planning framework can produce different outcomes depending on local market conditions and demand drivers.

What needs to happen for housing delivery to increase?

Despite the arguably narrow focus on planning reform during the early part of this Parliament, the relative positions of the government, local authorities, housebuilders and the HBF are perhaps less contradictory than they first seem. The government is focused on the framework within which development takes place and the measures needed to support delivery. Local authorities are focused on the capacity required to operate that framework effectively. Developers are assessing how market conditions, costs and investment returns influence development activity, and the HBF is drawing attention to the cumulative pressures affecting those calculations.

The challenge for policymakers and stakeholders is therefore twofold: not only does the sector need to create more opportunities for development, it needs to ensure that approved schemes can actually be delivered in increasingly complex circumstances.

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^{(1) GOV.UK – Housing and Planning Minister speech to UKREiiF 2026 - here}

^{(2) LGC – Exclusive: Scepticism over housing policies - here}

^{(3) London Stock Exchange}