Critical briefing: home ownership headaches

Britain is building homes, but not as many homes as are needed. The Labour Government had aimed for around 370,000 in England per year, in order to fulfil its promise to build 1.5 million new homes over its optimistic five-year tenure. In 2024/25, it delivered only around 200,000 net additional homes, incorporating new builds, changes of use, and conversions between houses to flats. 

This headline figure of 200,000 new homes is often cited by the Government to claim that the housing crisis is being addressed. In October, the Housing Secretary, Steve Reed, even said, “My job should be on the line if I fail to meet my target.”

What this figure does not show is how many — or how few — of these homes were available for an ordinary buyer to walk into an estate agent and purchase. The answer? Far fewer than these claims would suggest. This reveals that the housing market has been restructured to serve the interests of, seemingly, everyone aside from those hoping to purchase a home.

Of the 208,600 net additional dwellings that were created in 2024/25, only 21,261 were made available for general sale to the public through estate agents, according to new analysis of the data. The rest were absorbed by three main housing provision channels before an ordinary buyer could get anywhere near them.

The largest of these channels is the affordable housing scheme, whereby homes are bought by housing providers and sold or let below market value, with the difference subsidised by local authorities. Government statistics confirm that 58,960 of these new dwellings — around 31 per cent — went directly into the affordable housing stock, largely through housing associations or local government schemes. Part of this is because the Government forces developers to hand them over. Under the Town and Country Planning Acts 1990, Section 106 planning obligations require developers to hand over a proportion of housing units in exchange for planning permission.

The second channel is Build to Rent. These homes are constructed specifically for institutional landlords and are never offered for sale, as the name implies, to ordinary buyers. Data from Savills shows that the UK’s Build to Rent stock increased by 13 per cent at the end of 2025 compared to the previous year, at almost 150,000 completed homes. This appears to be a rapidly growing segment: in the final quarter of 2025, almost £2.7 billion was invested directly into Build to Rent housing stock — more than the full year totals for 2016, 2018, or 2019.

London, as always, appears to be the worst affected

The third channel is shared ownership, whereby a buyer can purchase a percentage of a property and pay a subsidised rent on the remainder, usually to Co-Ownership, a housing association. The scheme targets first-time buyers who, due to being squeezed by low pay and a high cost of living, are unable to pay the full cost of a deposit for an entry-level home. In 2024/25, according to official statistics, 70 per cent of shared ownership purchases were by first-time buyers. While formally classified as homeownership in Government statistics, it is not fully so. Buyers often take on outsized maintenance obligations and service charges, and are unable to accumulate equity on the share of the property they do not own. In many schemes, rent escalates annually regardless of market conditions. 

London, as always, appears to be the worst affected. There, only 2 per cent of newly built homes were made available to purchase on the open market. This fits with the emergent trend of general decreasing private home sales in the capital; only 7,500 private homes were sold in London in 2024, a reduction of 63 per cent from the peak a decade earlier. 

London’s new-build market has been shaped by a decade of policy decisions that made institutional and affordable delivery more attractive, or accessible, to property developers than private sales. Historically, a large proportion of new-build buyers in London were overseas investors, drawn by the relatively low interest rates and strong equity appreciation that homeowners could once expect. As interest rates rose and the tax environment allowing for buy-to-let housing deteriorated, this market contracted sharply. Affordable housing providers and Build to Rent developers have filled the void. 

There is a deep affordability problem contributing to all of this. Even the relatively few homes hitting the private market are struggling to find buyers. In the year to March 2024, the number of new-build homes for sale on the private market had decreased by 26 per cent from the previous year. Savills are now predicting that the Government will not even be able to make it 60 per cent of the way to its target of 1.5 million homes in five years.

Britain’s housebuilders are facing dire consequences, too. Barratt Redrow saw its share price fall 33 per cent in a single month at the beginning of the year. Vistry reported a 9 per cent fall in completions in its March 2026 results — its shares fell close to 20 per cent on the day. 

Who loses from all this? Not the long-term renter, or young people just beginning their careers. For them, as yet unexposed to the private market, there is no equity to lose, and a fall in house prices that may be on the horizon could help them enter the market quicker, at a better price, and in a better house. It is our long-suffering Nick, now in his 30s, who scraped together a deposit to buy at the high prices experienced in the past few years, whose investment is likely now to rapidly move against him.