David Fell, lead analyst at Hamptons, said: “Despite some green shoots of recovery, the current trajectory means the government’s target to build 1.5million homes this parliament is going to be missed by around a third.
“Even as mortgage rates have fallen, the lack of a replacement for the Help to Buy scheme means for many developers the going is still tough.
“Last year, less than a third of new homes were sold off-plan, down from a peak of 50% in 2016. This has slowed down sales rates, with developers spending more time and money finding buyers for each home.
“London in particular has borne the brunt of the slowdown, with the Building Safety Regulator making securing planning for blocks over 18 metres particularly challenging.
“During the last downturn, affordable homes were housebuilders’ hedge against a tough sales market. But these times have long gone.
“The market for affordable homes remains particularly tricky, with few housing associations in a position to purchase the affordable homes delivered alongside private developments.
“And it’s a similar story for many build-to-rent operators, who had been picking up some of the slack. They have also seen big rises in build and finance costs as rental growth slows.”
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