Zoopla Finds Half England Financially Unviable for New Home Building

New analysis from property website Zoopla reveals that building new homes is financially unviable in nearly half of England, with viability challenges present in almost two-thirds of the country. The core issue is a mismatch where construction costs have risen by 17% since 2022, while average home sale prices have increased by only 1%, making developments unprofitable in many affordable areas, especially in the Midlands and North. This affordability gap is worsened by factors including the end of the Help to Buy scheme, rising mortgage rates, higher borrowing costs, increased regulatory expenses such as the Building Safety Levy, and the Future Homes Standard. A stark north-south divide exists, where southern England has more viable development areas but also some of the least affordable housing markets, limiting demand and slowing sales. Planning permissions have dropped significantly, falling to their lowest in years, putting the government’s target of building 1.5 million homes over five years at risk. Zoopla recommends reforms to simplify planning, targeted funding for affordable housing, and support for first-time buyers to address these intertwined challenges.