New UK home building slumps as housing industry faces 'critical point’

Become an Independent member to bookmark this article Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Membership today. Join today Already a member? Log in The number of new homes fell by 13 per cent year-on-year in the third quarter of the year, figures from a warranty and insurance provider show. According to the National House Building Council (NHBC), 26,231 new homes were registered in the quarter, down from 30,279 in the third quarter of 2025. Private sector registrations declined 8 per cent to 18,359, compared with 20,054 a year earlier, as persistent affordability pressures hit demand and supply constraints slowed delivery. The rental and affordable housing sector saw a 23 per cent drop, falling to 7,872 from 10,225 in the third quarter of 2025. The NHBC accounts for over 70 per cent of the UK’s new build warranty and insurance market. Its figures offer an early glimpse of future housing supply, as properties are registered prior to construction. The statistics arrive after the government introduced its Your First Home scheme , offering first-time buyers a new build property with a 2.5 per cent deposit, supported by an additional 20 per cent state loan. Full specifics, including household income thresholds and local property price caps to target assistance, are set to be outlined in the Budget . Daniel Pearce, chief strategy officer at the NHBC, said: “The housing industry is at a critical point. Invest at least £100 in Stocks or ETFs of your choice. Get fractional shares worth £50! Terms and conditions apply. Go to website ADVERTISEMENT Invest at least £100 in Stocks or ETFs of your choice. Get fractional shares worth £50! Terms and conditions apply. Go to website ADVERTISEMENT “Demand remains fragile, affordability is stretched and our latest figures show that the pipeline of new homes is continuing to shrink. “Without action to support demand and tackle the barriers to delivery, increasing housing supply will remain extremely challenging. “The government’s proposed Your First Home equity loan scheme is a significant and welcome step towards tackling one of the market’s biggest challenges – affordability. “The Budget now needs to provide clarity on how this scheme will operate. “Targeted support for first-time buyers could help more people achieve home ownership while supporting demand for new homes, but its effectiveness will depend on getting the design right, including the nature of developer contribution and ensuring that any price and salary caps are set to reflect local market conditions and support viability and affordability. “Alongside planning reform, greater regulatory certainty and stability is critical to investor and house builder confidence and to long-term delivery. “A clear forward programme of regulatory change, with sufficient lead times and co-ordinated implementation, would give businesses greater confidence to invest in delivering more new homes, including in the skills and capacity needed to support it.” The NHBC said the biggest annual percentage falls in new home registrations it recorded in the third quarter of this year were in the South East of England and Northern Ireland, with a 32 per cent decrease recorded. open image in gallery Housing secretary Angela Rayner insisted she would not ‘give up’ on the target, but said international ‘headwinds’ had made it harder to achieve But some regions saw growth in new build registrations, with a 27 per cent increase in Yorkshire and the Humber and a 10 per cent increase in the West Midlands. Following a 170 per cent annual increase in the second quarter of 2026, new home registrations in London broadly returned to the same level as in the third quarter of 2025, the NHBC said. It said registrations in the capital can be particularly volatile, reflecting the timing of big developments. However, the longer-term picture in London remains subdued, the NHBC said, with new home registrations falling from 5,130 in the third quarter of 2019 to 1,223 in the third quarter of 2026. The government has set a target to deliver 1.5 million new homes in England over this Parliament. Last month, housing secretary Angela Rayner insisted she would not “give up” on the target, but said international “headwinds” had made it harder to achieve. Asked whether the government could deliver on its target, she told the BBC’s Sunday With Laura Kuenssberg programme in September: “It’s a slim chance, but I’m definitely not giving it up.” open image in gallery The National House Building Council (NHBC) said 26,231 new homes were registered in the third quarter of the year, down by 13 per cent compared with 30,279 in the third quarter of 2025 ( AFP/Getty ) Looking ahead to the Budget, Mr Pearce said: “Our new homes data underlines the scale of the challenge facing government and the industry if it is to materially increase housing supply. “The proposed Your First Home scheme is a welcome and important step, but there is no single solution. “Sustainable growth will require action on both demand and supply – improving affordability for buyers while creating conditions for developers and investors to build with confidence by considering delivery costs, planning and regulatory constraints and investment barriers. “The Budget is an important opportunity to make progress on both sides of the equation.” The Budget will include more than £1 billion for social and affordable housing and councils will be given extra borrowing powers to fund housebuilding. Here are the new home registrations recorded in the third quarter of this year and the annual change, according to the NHBC: North East, 1,336, minus 18% North West, 3,073, minus 17% Yorkshire and the Humber, 1,971, 27% West Midlands, 2,580, 10% East Midlands, 2,681, minus 19% East of England, 3,486, minus 20% South West, 3,024, minus 3% London, 1,223, minus 1% South East, 3,517, minus 32% Scotland, 2,330, minus 5% Wales, 647, minus 24% Northern Ireland and Isle of Man, 363, minus 32%