Understanding the delays holding back delivery

Over the past year, we have helped our developer clients restructure too many residential led schemes. Sites with planning permission are sitting idle. Capital is available, yet delay dominates. We are finding that deals are being re-negotiated before construction can begin.

This slowdown is unlike previous cycles. It reflects an emerging shift in risk assessment with delays increasingly shaping decisions in a way that construction risk once did. 

England delivered 208,600 net additional dwellings in 2024/25 far short of the 300,000 homes a year needed to reach the government’s 1.5 million target. In London, private housing starts have fallen 84% since 2015. Those headline figures capture the output gap, but not the underlying caution shaping funding decisions.

A shift in funding behaviour: timing risk now dominates

Funders have become far more sensitive to timing. A decade ago, a project with planning permission, a strong location and clear demand usually secured favourable terms. Pricing revolved around build costs, sales prospects and the developer’s track record. That approach has changed.

Even robust scheme proposals delivered by experienced developers attract higher costs to cover anticipated delays caused by:

• lengthy planning processes;
• slow discharge of conditions;
• Gateway 2 requirements under building safety regulations;
• biodiversity net gain obligations and other environmental regulations;
• expanded drainage and private highway standards;
• historically high SDLT rates discouraging buyers, both domestic and international.

The forthcoming Building Safety Levy adds a further pressure point for schemes that do not fall within transitional arrangements. The levy is due to apply to all building control applications made on or after 1 October 2026, with no transitional provisions for applications submitted after that date, meaning any project that has not secured building control approval beforehand will be subject to the charge unless exempt. 

Each individual requirement serves a valid purpose. Combined, they prolong pre‑construction timelines and increase upfront costs. 

The cumulative effect: time as the new viability test

When funders factor extended timelines into their models, viability tightens and the pace of delivery inevitably slows. What once looked straightforward now turns on how long capital must remain committed before construction can begin.

Investors remain active, but it appears their focus is on schemes with more predictable delivery and clearer risk profiles, including:

• funding phased development rather than whole‑site commitments lowering risk of delivery and limiting capital exposure;
• forward‑funded build‑to‑rent, where income is considered more predictable and less sensitive to sales conditions;
• conversions through permitted development rights which typically carry fewer planning conditions and benefit from shorter construction programmes; or
• straightforward brownfield projects with fewer unknowns.

Post consent viability: assumptions that no longer hold

Many consents granted in and around 2021–22 relied on outdated assumptions about costs, interest rates and sales values. As conditions have shifted, previously agreed affordable housing requirements may no longer be workable. While legal mechanisms exist, including viability reviews and section 106 modifications, these take time, evidence and money.

Even where a local planning authority is willing to engage and support a developer's re-appraisal, demand from registered providers has weakened partly because many are diverting capital towards building safety and retrofit obligations rather than new acquisitions.

A successful re-evaluation does not guarantee that the affordable element can be sold.

Developers face a sequence that will be familiar to many:

1. secure consent based on earlier projections;
2. reassess viability using current data;
3. renegotiate affordable housing terms to keep the scheme feasible; and
4. absorb additional professional fees and holding costs throughout.

This is not an attempt by developers to dilute housing delivery. It is a practical step to ensure that consented schemes are actually built. Holding rigidly to mixes set under materially different market conditions risks leaving land undeveloped. Allowing quick and efficient evidence based adjustments after consent is critical if delivery is to improve.

What would improve delivery

To meet housing goals, attention needs to shift from targets to the processes that govern delivery. Three changes would make a meaningful difference:

1. Faster, more predictable planning processes, particularly around discharging conditions and securing building safety approvals;
2. Evidence based post consent viability reviews, enabling proportionate adjustments to affordable housing where assumptions have materially changed;
3. Recognition that stamp duty affects absorption rates and therefore has a direct bearing on financial viability.

Developers are used to managing construction and sales risk. Prolonged uncertainty around timing is far harder to absorb.

There is, however, room for cautious optimism. 

Building safety approvals are steadily becoming more predictable as the sector adapts to the new regime and ongoing planning reforms tentatively acknowledge a need for greater consistency and efficiency. If these improvements continue, the cumulative delays that currently hinder delivery should begin to ease, allowing well designed and viable schemes to progress with fewer obstacles.

The UK has both strong underlying housing demand and the capital ready to support new development. Until procedural delays are treated with the same seriousness as technical construction risk, delivery will continue to fall short of national ambitions.

The schemes that continue to move forward tend to be those that address planning, safety and viability challenges early and coherently. When developers and funders can demonstrate clear delivery pathways, robust compliance strategies and realistic viability positions, confidence grows and capital follows. With the right advisory support, integrating planning, building safety, regulatory strategy and deal structuring, many of today’s delays can be mitigated rather than endured. As clarity improves across the new regulatory landscape, well‑prepared schemes will be well placed to progress.