The biggest problem that the construction industry is facing at the moment is the fact that housebuilding is slowing down, and this is not a recent trend. The latest quarterly data from the Office for National Statistics (ONS) was released at the end of April, revealing that housing starts in the UK lagged completions for the sixth successive quarter in Q4 2024.
Construction started on around 32,000 homes in the last quarter of 2024, according to the ONS, which is down from 37,000 in Q3 2024 and is now well below the average of 42,000 homes that were started per quarter when the ONS resumed gathering the data after the pandemic in April 2022.
Responding to the ONS data, Pocket Living chief executive Paul Rickard said: “By any measure these are a disappointing set of figures and continue to highlight the massive challenge the government has in delivering 1.5m new homes within the next four years.”
Rickard urged the government to look beyond planning reforms to incentivise more housebuilding, including measures to encourage SME housebuilders. He added: “Planning reform is only part of the answer. With one in three approved homes still unbuilt since 2015 and viability now beyond breaking point, it’s time for policymakers to work with the sector to find real, workable solutions.
“This must include policies to encourage an SME housebuilding renaissance, maximising the opportunities of devolution and Homes England reform, introducing flexibility on affordable tenure, using the forthcoming Spending Review and Housing Strategy as a major delivery reset moment, and applying a proportionality test for new and existing regulations.”
Build-to-rent is in freefall
While the number of quarterly construction starts of new-build homes for sale has slumped by almost 24% over the past three years, the figures within the build-to-rent sector are even more concerning, with constructions starts falling by around 66% in the past 2.5 years, from around 28,000 starts in Q3 2022 to less than 10,000 starts in Q1 2025, according to the latest (Q1 2025) Build to Rent report by the British Property Federation (BPF).
