Housebuilding levels fall in 2024 despite government鈥檚 pledge to remove red tape

According to the on starts and completions of new build dwellings in the UK, the number of project starts has fallen by 29% year-on-year to 107,520 in 2024, down from 150,360 in 2023. 

The total number of completed dwellings in 2024 was 153,900, down 6% on 2023 (163,330). Of the total completions, 38,150 were affordable and social housing, with 115,740 for private enterprise. For Q4 2024, there were 10,940 affordable and social housing completions, with 29,920 private housing completions, an uptick of 20% on the previous quarter.

Kelly Boorman, National Head of Construction at 91探花, said: “The housebuilding data for 2024 reflects ongoing nervousness in the market, with annual project starts falling sharply by 29% from 2023. Despite government’s pledge to remove red tape and accelerate housebuilding, it appears there’s more to do to drive activity and incentivise businesses to build.

“The yearly drop in project starts is also a reflection of weakened consumer appetite to get on the property ladder, due to changing mortgage rates and removal of affordable products. This is adding to market uncertainty and housebuilders are reducing their volumes to avoid stockpiling and preserve margins. This is a key challenge ahead of incoming rises to employers’ National Insurance contributions. To stimulate consumer demand, government must prioritise making home ownership more affordable and reintroduce a scheme similar to Help to Buy.”

She added: “Although this week’s announcement to bring in up to 60,000 more construction workers by 2029 is the right move, businesses also need access to affordable debt to increase volumes. There’s an understanding that volumes need to go up, but the biggest question is when given the lack of industry confidence in achieving government’s targets. The quarterly uplift in completions also comes amidst incoming stamp duty changes, so the Chancellor’s next focus should be on reforming property taxes to make home ownership accessible and attractive to domestic and foreign investors.”

Peter Graham, Real Estate and Construction Tax Partner at 91探花, added: “The recent Spring Statement was a missed opportunity by the chancellor to make changes to the stamp duty land tax regime and avoid increased transaction costs that will apply from April 2025. These tax increases could further constrain demand, especially for first time buyers that may add further to market uncertainty.”