Data from Savills has predicted that just 837,500 new homes will be completed in England in the five years up to 2029-30, far below the government’s 1.5m target.

Citing government planning data, Savills revealed that new home completions fell 4.1% to 190,602 in the year to March 2025. It now forecasts that new home completions in England will average 167,500 per year.

Savills estimates that around 189,000 homes were built in 2025-26, but expects output to fall sharply over the next two years, to just over 150,000 homes in both 2026-27 and 2027-28.

In March, data published by the Ministry of Housing, Communities and Local Government revealed the number of planning decisions made in England fell by 4% in Q4 2025.

Savills accredits the figures to viability challenges in construction, with build costs rising 17.5% in the four years to February 2026, while average house prices rose 4.5%.

New government data shows planning applications for homes rose 44% in the past year, back to levels seen in 2022 and 2023, but Savills warned that it will take at least 18 months for this to feed through into higher completion volumes.

Emily Williams, director of residential research at Savills, said: “England’s housing delivery has proven to be reasonably resilient in the face of recent economic headwinds, but the underlying picture is becoming increasingly challenging.

“Low levels of planning consents and starts mean a thinner pipeline of homes under construction, while affordability pressures, higher interest rates and rising development costs are constraining demand and viability.

“There are encouraging signs at the start of the planning process, but it will take time for those improvements to feed through. In the meantime, boosting demand remains the clearest policy lever for lifting delivery.”

The Savills research comes as data from the Land, Planning and Development Federation (LPDF), in partnership with multi-disciplinary development consultancy Marrons, reveals that planning permission for small to medium sites with 10 to 49 dwellings fell 61% from 69,702 homes in 2016 to 26,909 in 2025.

It added that planning permission for sites exceeding 50 dwellings fell 22.8% over the same period. As a result, small and medium-sized sites now account for only 8.6% of all homes granted planning permission, down from 15.8% in 2016.

LPDF chair Paul Brocklehurst said: “SMEs delivered 40% of this country’s housing in the 1980s; today it is less than 10%. This research highlights the continuation of this trend, which extrapolated forward would lead to the effective extinction of our SME builder base.

“This would be bad for consumers, local supply chains, the economy and the health of the sector, and would ensure that any government would be unable to deliver the new homes this country so desperately needs. It highlights the need for government to be bold in its policies. The country needs more builders not less.”