NEWS·SEPTEMBER 2026
Angela Rayner has stated there is only a slim chance of meeting the government target of 1.5 million new homes in England, highlighting persistent challenges for the UK development sector.
Deputy Prime Minister Angela Rayner has acknowledged that the government is unlikely to meet its manifesto pledge of building 1.5 million new homes in England over the current parliamentary term. Speaking to the UK press, she noted there is only a slim chance of achieving the target. This admission signals continued structural constraints within the UK planning and development system.
For real estate investors, developers and housing providers, this underscores a persistent undersupply that will dictate market dynamics in the medium term. The failure to stimulate housing delivery will have profound implications for market liquidity and project viability.
Recent reports highlight Rayner acknowledging that achieving the target relies on overcoming deeply entrenched barriers. Planning delays, viability issues and elevated construction costs continue to restrict the pace of delivery across the sector. Supply chain disruptions and skilled labour shortages further exacerbate project timelines.
Furthermore, local authority planning departments remain under-resourced, creating extensive bottlenecks for viable schemes awaiting consent. The combined effect of these factors has suppressed starts on site, making the annualised requirement of 300,000 new homes virtually impossible to reach.
The shortfall in projected housing delivery will sustain upward pressure on residential values and rents. Investors holding income-producing assets may benefit from low vacancy rates and consistent tenant demand, but the restricted pipeline poses immediate challenges for developers seeking to deploy capital at scale. Consequently, land values for shovel-ready sites with implementable consent are likely to command a significant premium.
In this challenging environment, GLPG advises clients to focus on optimising site viability and securing robust capital structures. Through our Agency division, we assist clients with both acquisition and disposal strategies, actively identifying off-market land opportunities where planning risk is mitigated.
Developers must adopt a rigorous approach to site acquisition, ensuring that planning assumptions are grounded in the current policy reality. Sites with alternative use potential or permitted development rights may offer more secure avenues for capital deployment.
Capital constraints remain a primary concern for the market. The rising cost of materials and extended project timelines require highly resilient funding strategies. Our Capital Advisory team works to structure bespoke debt and equity finance solutions that account for prolonged development cycles.
Securing flexible funding facilities early in the development lifecycle is essential to manage unexpected cost overruns effectively.
The admission from the government carries significant weight for affordable housing delivery. Reduced private sector output inherently limits the provision of affordable tenures delivered through Section 106 agreements. As the volume of private developments contracts, the pipeline of affordable units transferred to registered providers shrinks accordingly.
Our Affordable Housing division works closely with developers and housing associations to navigate these intricate negotiations. Viability assessments and proactive engagement with registered providers remain critical to unlocking complex sites. Developers must structure their Section 106 obligations carefully to ensure schemes remain financially viable.
Market participants must now watch for further government interventions designed to stimulate delivery in the face of these missed targets. Policy shifts, targeted funding initiatives or interventions from Homes England may emerge as ministers attempt to close the delivery gap. Adapting to these legislative changes swiftly will be key to capitalising on forthcoming real estate opportunities.
NEWS·SEPTEMBER 2026
Angela Rayner has stated there is only a slim chance of meeting the government target of 1.5 million new homes in England, highlighting persistent challenges for the UK development sector.
Deputy Prime Minister Angela Rayner has acknowledged that the government is unlikely to meet its manifesto pledge of building 1.5 million new homes in England over the current parliamentary term. Speaking to the UK press, she noted there is only a slim chance of achieving the target. This admission signals continued structural constraints within the UK planning and development system.
For real estate investors, developers and housing providers, this underscores a persistent undersupply that will dictate market dynamics in the medium term. The failure to stimulate housing delivery will have profound implications for market liquidity and project viability.
Recent reports highlight Rayner acknowledging that achieving the target relies on overcoming deeply entrenched barriers. Planning delays, viability issues and elevated construction costs continue to restrict the pace of delivery across the sector. Supply chain disruptions and skilled labour shortages further exacerbate project timelines.
Furthermore, local authority planning departments remain under-resourced, creating extensive bottlenecks for viable schemes awaiting consent. The combined effect of these factors has suppressed starts on site, making the annualised requirement of 300,000 new homes virtually impossible to reach.
The shortfall in projected housing delivery will sustain upward pressure on residential values and rents. Investors holding income-producing assets may benefit from low vacancy rates and consistent tenant demand, but the restricted pipeline poses immediate challenges for developers seeking to deploy capital at scale. Consequently, land values for shovel-ready sites with implementable consent are likely to command a significant premium.
In this challenging environment, GLPG advises clients to focus on optimising site viability and securing robust capital structures. Through our Agency division, we assist clients with both acquisition and disposal strategies, actively identifying off-market land opportunities where planning risk is mitigated.
Developers must adopt a rigorous approach to site acquisition, ensuring that planning assumptions are grounded in the current policy reality. Sites with alternative use potential or permitted development rights may offer more secure avenues for capital deployment.
Capital constraints remain a primary concern for the market. The rising cost of materials and extended project timelines require highly resilient funding strategies. Our Capital Advisory team works to structure bespoke debt and equity finance solutions that account for prolonged development cycles.
Securing flexible funding facilities early in the development lifecycle is essential to manage unexpected cost overruns effectively.
The admission from the government carries significant weight for affordable housing delivery. Reduced private sector output inherently limits the provision of affordable tenures delivered through Section 106 agreements. As the volume of private developments contracts, the pipeline of affordable units transferred to registered providers shrinks accordingly.
Our Affordable Housing division works closely with developers and housing associations to navigate these intricate negotiations. Viability assessments and proactive engagement with registered providers remain critical to unlocking complex sites. Developers must structure their Section 106 obligations carefully to ensure schemes remain financially viable.
Market participants must now watch for further government interventions designed to stimulate delivery in the face of these missed targets. Policy shifts, targeted funding initiatives or interventions from Homes England may emerge as ministers attempt to close the delivery gap. Adapting to these legislative changes swiftly will be key to capitalising on forthcoming real estate opportunities.