The housebuilding sector in England and Wales is urging the government to reintroduce the Help to Buy scheme or implement an equivalent demand-side stimulus to address declining new home deliveries amid challenging economic and regulatory conditions. Industry representatives emphasize that the sector plays a crucial role in supporting employment, GDP growth, and public finances, while also providing social benefits linked to stable housing.

Currently, the industry faces mounting obstacles, including a growing cumulative regulatory burden, increased taxation, and inflation, which collectively have raised the cost of building new homes. According to research by the Home Builders Federation (HBF), these factors have added approximately £76,000 to the cost of constructing a new home since 2020, with the figure rising to £96,000 in London. This increase amounts to about 20% of the average new-build price of £365,000. In comparison, house prices have risen by around 12% during the same period, while build costs have increased by 25%. This trend disproportionately affects the new-build sector, which is responsible for adding to the country's housing stock, unlike the secondary market.

The growing costs and regulatory demands are impacting the viability of new developments, particularly in regions where build costs are high relative to sales prices—often the areas in most need of additional housing. According to the HBF’s State of Play study, 90% of small and medium-sized housebuilders reported that regulatory and tax pressures are affecting the financial viability of their projects, with 68% stating the impact on their business is significant. The sector warns that without meaningful policy intervention, these cost pressures will continue to rise, resulting in reduced housing output.

Affordability constraints are leading to weaker buyer demand, especially among first-time buyers, which is holding back housebuilding nationwide. Industry data indicate that new home completions in England could fall to approximately 152,000 in 2026–27, less than half of the government’s target of 300,000 annual new homes, and the lowest level since 2015. Analysts point to constrained affordability and the termination of Help to Buy as key factors driving demand to levels reminiscent of the financial crisis in some regions.

The challenges have broader social and economic implications. Analysis from Connells suggests that nearly one in three first-time buyers had already started a family before purchasing their first home, highlighting the financial pressures facing young families. Reduced entry to homeownership limits upward mobility within the housing market and prolongs time spent in the rental sector, which further inflates rents. This cycle makes saving for a deposit increasingly difficult for younger people.

Housebuilding also supports up to 834,000 jobs across England and Wales, spanning the supply chain and wider economy. The sector is regarded as an accessible employment route, providing opportunities for young workers with or without higher education. However, uncertainty and weak demand hinder investment in training, presenting challenges to government priorities such as reducing youth unemployment and improving skills development.

Industry leaders call for a comprehensive review of the cumulative regulatory burden to simplify and streamline requirements where possible, ensuring that policy does not undermine efforts to increase housing supply. Alongside regulatory reform, the reintroduction of Help to Buy or a similar scheme is seen as the fastest way to revive demand, particularly among first-time buyers, and to stimulate housing market activity nationwide.