Survey finds developer confidence in short-term growth, but long-term challenges persist
A majority of UK property developers are optimistic about the country’s ability to meet government housebuilding targets, according to new research from Shawbrook.
The UK government has introduced several measures to accelerate home construction, including mandatory housing targets for councils, revised planning rules, recruitment of 300 new planning officers, and incentives for development. Shawbrook’s research indicates these policies are contributing to developer confidence.
The survey found that nearly two-thirds (64%) of developers expect an increase in housebuilding within the next 12 months. However, confidence declines over time, with 51% predicting growth over the next one to three years and 52% expecting expansion within three to five years.
Developers’ optimism may be linked to the government’s goal of delivering 1.5 million homes over five years. When asked about achieving this target, 59% of developers said it would be manageable, while 41% saw it as a challenge. This outlook contrasts with recent S&P Global UK Construction PMI data, which reported the steepest drop in construction activity since May 2020, citing weak demand and broader economic concerns.
Despite the short-term confidence, many property professionals remain doubtful that the 1.5 million-home target will be met. A webinar poll conducted in November showed widespread scepticism among industry participants. A recent survey by Knight Frank suggests that the UK is on track to complete only half of its annual 300,000-home target.
Developers highlighted several challenges affecting the sector. One-third (33%) pointed to limited support for first-time buyers as a major hurdle to homeownership. Another 33% said infrastructure, including transport and public services, was inadequate to sustain new developments.
Resource constraints remain a key concern. Nearly 29% of developers said funding for projects is insufficient, while 28% pointed to a shortage of land in high-demand areas. Another 28% flagged concerns about limited resources for meeting construction targets.
“While the developers we spoke to are confident, scepticism remains more broadly in the market,” said Terry Woodley (pictured), managing director of development finance at Shawbrook. “There has been some progress over the past year in reducing planning red tape and streamlining processes, but more needs to be done to make the 1.5 million new home target feel more achievable.
“Resource constraints remain a major challenge — whether in the form of materials and supply chain issues or the sector’s ongoing skills shortage. To truly unlock the UK’s housebuilding potential, the Government should make addressing these issues a priority.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
