The UK New-Build Housing Market in 2025: Trends, Challenges & Opportunities

What’s really going on with new-build homes in the UK—and what it means for buyers, developers, and investors.

Residential confidence improving: In early 2025, 61% of property developers expected the housing market to improve, with 85% of those focusing on new builds or conversions feeling particularly optimistic.
Housing starts and targets: JLL forecasts an increase from 157,000 new housing starts in 2025 to 244,000 by 2029, contributing to a total of 1 million new homes built between 2025–2029, with conversions adding another 200K for a combined 1.2 million units.
Government ambitions and infrastructure backing: The UK aims to build 1.5 million homes this parliamentary term, supported by £2 billion allocated for 18,000 social homes and included within broader infrastructure investment plans.

Greater central oversight and council sanctions: The Deputy Prime Minister plans to impose stricter sanctions on councils that block new housing―lowering intervention thresholds to 5% of overturned appeals―to help meet national targets.
Planning reforms to accelerate delivery: The Planning & Infrastructure Bill and revisions to the National Planning Policy Framework (particularly green belt policy) aim to streamline development, with projections suggesting the fastest building pace in 40 years by 2029–30.
Public sentiment shifting: Although local opposition to new housing has increased in some areas, more than half of Britons reportedly support housing in their area. The silent majority’s approval suggests room for more representative local consultation.

Average new‑build prices falling in some regions: As of July 2025, new-build asking prices dropped by up to £43,000 in the East Midlands, and also declined in the North East and South West. Yet, regions like the East of England (+£20K) and West Midlands (+£13K) saw increases. Overall, the UK average was around £427,143.
London’s volatile new build premium: February 2025 data showed new builds in London averaging £596,000, with a hefty 19.1% annual increase—though June data also revealed a 14% decline year-on-year, signalling some market correction. The £500K–£750K segment remains especially active, and “move-in ready” homes are in higher demand than off-plan units.
Moderate price growth outlook nationally: Forecasts for 2025–26 show modest regional growth: London (~2.5%), South East (2.0%), North West (3.2%), West Midlands (2.8%), Scotland (1.9%), Wales (1.5%), and Northern Ireland (1.2%).
New‑build price growth vs depreciation risk: Research suggests that while new builds often command 10–20% premiums, they may depreciate significantly immediately post-purchase. Energy-saving features, government incentives (like 5% deposit schemes, equity loans in London), and long-term warranties help offset costs.

Focus on green, efficient homes: New-builds increasingly incorporate sustainability—solar panels, heat pumps—to meet the Future Homes Standard, set to require 75–80% lower carbon emissions for new homes beginning in 2025.
Proptech and digital transformation: From virtual viewings to online conveyancing, the market is digitizing to improve transparency and reduce transaction times.

Persisting affordability pressures: First-time buyers still rely heavily on family or schemes for deposits, and are spending more of their income on mortgage repayments than historical averages.
Planning delays and supply constraints: Planning permissions remain low (230K annual approvals)—the lowest in a decade—driven by regulatory bottlenecks and community pushback. London’s housing starts are down nearly 70% since 2015, threatening future supply; only a small fraction of sites are projected to complete beyond 2027.
Rising build costs and supply chain pressures: After high builds in 2022–23, build cost growth has eased to around 2%, though future material costs may rise ~15% over five years. Developer models like Vistry’s partnership with registered providers and master-developer models (e.g. Made Partnership) are adapting to these pressures.
Competition scrutiny: Major housebuilders like Taylor Wimpey and Vistry are under CMA investigation for potentially anti-competitive conduct. In July 2025, housebuilders offered £100 million towards affordable housing as part of a deal to conclude the probe.

Brent Cross Town, London: A £8 billion development featuring 6,700 homes and enhanced transport infrastructure. First residents began moving in during early 2025.
Victoria Riverside, Manchester: A £185 million, 634-home, high-rise development completed in 2025 as part of a wider 15K-home masterplan for the Victoria North area.

Opportunities for buyers and developers: New builds offer energy efficiency, strong warranties, and government support—but buyers should be aware of potential near-term depreciation and rely on long-term value.
Regional nuances matter: Demand and pricing vary widely across the UK. Developers and investors should consider local market dynamics, supply availability, and affordability trends.
Policy shifts are pivotal: Planning reforms and central interventions are shaping the pace and scale of new development, integrating more affordable and sustainable housing into the supply pipeline.
Designing future resilience: Sustainable, digitally-enabled, and adaptable housing models (e.g., modular or build-to-rent with flexibility) may outperform in this evolving landscape.

Reference list

Shawbrook Bank. (2025). UK Residential Property Market 2025: Developer Confidence.

JLL. (2025). UK Residential Forecast 2025–2029.

The Guardian. (2025, August 29). Rayner could hit English councils that block housing developments with tougher sanctions.

The Times. (2025). We need a planning system that gives a voice to the quiet YIMBYs.

Property Reporter. (2025, July). Average new build market prices fall by up to £43,000.

Knight Frank. (2025, February). London New Homes Update: February 2025.

London Property Talk. (2025, May 29). London’s New Build Market: Opportunities and Future Supply Outlook.

London Estate Agency. (2025). UK Property Market Forecast 2025.

Science of Property. (2025). Should You Buy a New Build? Pros, Cons & Financial Considerations.

SmoothSale. (2025). UK Housing Market Predictions for 2025.

MoneyWeek. (2025). Nationwide: House Prices Unexpectedly Dropped in August.

Housebuilder Pro. (2025, May 22). UK Housing Market Update 2025: Homes England Exceeds Targets Amid Rising Inflation & New Growth.

Clarke Willmott. (2025). Residential Land Market Update.

Wikipedia. (2025). Barratt Redrow Merger and CMA Investigation.

Wikipedia. (2025). Brent Cross Town Development.

Wikipedia. (2025). Victoria Riverside, Manchester.

Housing Market News UK. (2025). Housing Market News in UK: Trends, Insights, and What to Expect.

Simple Crowdfunding. (2025). UK Property Market Update – June 2025.