Yesterday’s edition of The Times (3 December 2025) carried an interesting and limited article by Neal Hudson. He is a housing market analyst. Interesting because his descriptions of the market failures, explaining why UK houses are not getting more affordable are correct. With some frustration they do not explain the root causes: why this gloomy outlook is accurate. It is not obvious why the housing supply market is broken, instead it is consigned to limping to the conclusion that ‘Miracles do happen, I guess. Though perhaps not in this economy.’.
Well, the good news is that a miracle in English housing supply can happen. It is within the power of English politicians to deliver. And a miracle could happen, thus re-igniting growth. Pause, think and reflect. There is a massive unfulfilled demand for homes. Except prices are simply too high. There is ample unprotected land in countryside areas and masses of unused airspace in urban areas where new supply can be built.. Within three to five years there could ample trained labour. . There is lots of creative capability in the linked professions, but much of it is tied in knots by negative mind-sets learned in thirty or forty years of barrier blasting. . Actually this mind-set has delivered one or two generations of pygmy thinking that stops us grabbing the opportunities waiting to be grabbed, that holds us back from building the homes the market pines for. Spatial echoes of Alice in Wonderland anyone?
But above all politicians must stop playing school children games learnt in the school playground. .Yaboo politics must be replaced with leaders who place civic duty first. So instead they must start working together. And must find the ways and means of turning unwelcoming local communities into host communities who welcome lots of new homes near them. Can it be done? Of course provided there is a clear understanding of the local issues, the hurdles, the local opportunities and the local fears and most of all a shared intent across the community to remove the barriers with local support. It will take time. It requires market insights. And deaf ears to the entreaties of local vested la
Which is why I found The Times piece inadequate if its intent was to explain to readers why house are not to going to fall much, or why the current slide in prices will not last for long.
Ask yourself why is new supply not coming along as rices slip? In the short term, say the decade now to the mid or late 2030’s suppliers of new homes have a nasty problem. Regulatory on site compliance problems have increased, building costs have increased and prices, usually relied to preserve profit margins have not increased too, but stagnanted or gone down. So in a perfect world based on today’s sale values, developers paid too much for the land. So building right now is not viable. Finished, brand new houses ready for occupation are sticking. It is obvious the builders should reduce the prices. But they won’t and can’t without staring the possibility of bankruptcy in the face. Most new build relies on debt financing. Which means lenders will not accept any price reductions which lead to reductions in the value of the completed project. Their security is at rusk. They will wait as long as necessary. Based on experience, think years. Rightly because history shows that measured in years market sentiment will switch again. In the meantime the promise of tax concessions on all house prices built, sold and occupied between January 2026 and December 2035 might bring about a rapid review of current, legitimate viability fears. .
What about second-hand housing supply? Sellers, whether they are trading up or down, moving jobs and locations or the beneficiaries of those who have passed away, all have strong opinions about the sale value of their house. Asked to consider a sale at a price less than expected requires time and personal financial pressures. If these are missing, if the need to sell is optional not mandatory many sellers too will resist downward market pressure., and they too may be bailed out by the usual return of the usual inflationary pressures sooner or later. But some, maybe a trickle will pioneer the market downwards. These are the ones that set the next value platforms. Which shrewd councils seeking to be ready to exploit their new freedoms ten years hence, and keen to avoid paying land value/hope value booby prizes will be watching like hawks.
Here are the levers of future supply. Self-funding if spatial policies are 10+ assured. Unless all future building land is nationalised? So we accept both main. supply pipelines in the short term can, and do, become sluggish when sentiment becomes negative. What is the answer? It is to accept this happens and instead increase perceptions about long term supply, through increased building land allocations 10+ years ahead which are assured by having official council responsibility to deliver in place. In consequence the short term market will react. It will accelerate build out rates of the existing stock of unbuilt but approved projects, ie. the land banks, by local councils ensuring that locally there is a cross-community commitment to lots of new homes 10/15/20 years ahead, which will put the skates under existing oven ready projects which are on hold.
You want a miracle? Here it is, without any divine intervention!
Ian Campbell
4 December 2025
