Curiosity in mass-developed new houses is sharply declining, with first-time consumers more and more turning away from costly developer-led housing.
In the meantime, demand for self-build and custom-build houses is rising steadily as extra individuals search management and affordability.
But regardless of this rising urge for food, planning permissions for self-build plots are falling, limiting the UK’s skill to fulfill its housing wants by this widespread route.
Planning permissions collapse as targets drift additional away
The variety of new houses granted planning permission in England in Q1 2025 has fallen to 39,170, the bottom quarterly determine since 2012, in line with the House Builders Federation’s (HBF) newest Housing Pipeline report.
This can be a 55% drop on the earlier quarter and a 32% drop year-on-year, inserting extreme stress on the federal government’s pledge to ship 1.5 million new houses by 2030.
HBF Chief Government Neil Jefferson warned: “The newest planning figures are disastrous for an trade and a authorities trying to enhance housing provide over the approaching years.”
He continued: “Planning permissions and home constructing ranges is not going to enhance except ministers work with trade and sort out the problems stopping corporations from urgent the accelerator and investing within the websites, expertise and provide chains wanted to construct the houses the nation wants.”
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New builds shedding favour with first-time consumers
In the meantime, new-build houses, the first supply of houses within the UK, are being shunned by first-time consumers.
A 2025 report from Examine My Transfer reveals that the proportion of first-time consumers buying new builds has dropped from 10.03% in 2022 to simply 7.72% in 2025.
Founder Dave Sayce stated: “The common value of a new-build residence in England as of October final yr was £420,000, rising 18% from the earlier yr. With the discount of the Stamp Obligation aid for first-time consumers, the tax they must pay on a median new-build residence will probably be £6,000. Even with a 5% deposit, first-time consumers must pay £27,000 up entrance on common.”
The one a part of the UK the place first-time purchaser curiosity in new builds is rising in Scotland, which noticed a 2.43% enhance in 2025.
Demand for self and custom-build houses is surging
Whereas conventional provide stalls, extra persons are exploring the potential of designing and constructing their very own houses.
In keeping with the Nationwide Customized and Self Construct Affiliation (NaCSBA), greater than 55,000 persons are registered with native councils in England beneath the Proper to Construct laws, which supplies people the best to request land to construct their very own houses.
Mario Wolf, founding director of the Proper to Construct Activity Drive, advised Parliament: “We’ve got huge untapped demand for self-build and {custom} housebuilding on this nation.”
Regardless of this demand, the UK builds simply 13,000–16,000 self or custom-build houses per yr, in comparison with greater than 50% of recent houses in international locations like Austria or Germany being constructed this fashion.
Planning permissions for self-builds falling behind demand in 2025
In 2025, curiosity in self-build houses stays robust, with native authority registers exhibiting continued progress.
Nonetheless, planning permissions for serviced plots are declining – dropping 18% within the yr ending March 2025 to simply over 5,000 plots.
The NaCSBA experiences related tendencies, with a 23% lower in permissions over current years.
Consultants warn this hole between demand and permissions dangers stalling the supply of much-needed new houses except pressing planning reforms are applied.
With out pressing reforms to planning insurance policies and assist for self-builders, 1000’s of potential new houses might by no means materialise.
