Britain has solved its housing capital problem and discovered a harder one

Homes England's figures for 2025/26 landed last week, and the temptation in Whitehall to call this a turning point will be strong. The agency enabled just over 40,000 completions, its best year since 2020, alongside more than 42,000 starts on site, and it beat two of its three government targets while lifting completions for social rent by 65 per cent, the tenure that matters most to people in greatest need. For an agency that has spent much of the past decade fielding criticism, that is a genuinely good year, and it deserves to be treated as one.

The trouble is that this acceleration sits inside a market still slowing down around it. Completions across England fell in 2025 to their lowest level since 2016, and Savills expects 2025/26 output to drop to around 160,000 homes, a number last seen in the middle of the last decade. Planning consents remain thin, housing association balance sheets are still stretched between building safety remediation and decarbonisation, and anything involving height or complexity barely stacks up at current costs and rates. One part of the system is running hot. The rest of it is cooling.

The government's response has been to direct capital at a scale the sector hasn't seen in a generation: £39bn through the Social and Affordable Homes Programme out to 2036, and up to £16bn more in debt, equity and guarantees from the newly operational National Housing Bank, working alongside private lenders. Add a development finance market where specialist lenders are now competing hard for the same sponsors and the same schemes, and one conclusion is hard to avoid. Money is no longer what's holding delivery back.

What holds delivery back now is the stretch between a funded scheme and a finished one, and it's not the kind of thing that makes it into a press release. Spend enough time monitoring development for lenders and you see the same faults resurface: tenders coming back well above cost plan on scope that hasn't changed, contractor covenants that read solidly until someone actually tests them, Building Safety Act gateways swallowing months nobody had priced in, utility connections and planning obligations chewing through programme while the headline figures still hold up fine. Governments talk about starts because starts still look good. The damage doesn't surface until completions, roughly two years later, which is exactly the lag the market is living through now.

The better lenders already know this, which is why their underwriting has changed. The question isn't whether demand for development finance exists, because it clearly does. It's whether the schemes they're funding will actually get to practical completion on the budget and programme underwritten at the outset. You can't answer that from a spreadsheet. You answer it on site, drawdown by drawdown, with cost data that's been tested rather than taken on trust, and with someone independent looking closely enough, early enough, to catch a scheme before it drifts too far to correct.

A start on site is a promise. A completion is a home. Everything that happens in between decides whether the government's £55bn turns into houses or into claims, delays and workouts, and closing that gap has nothing to do with more money. It comes down to knowing early, and knowing precisely, when a scheme has quietly stopped matching the story its sponsor is telling.

The capital problem is solved. The delivery problem is the one nobody's priced yet, and it's the harder of the two.

Joe Garner MRICS is a director and co-founder of Axo Consulting, a development monitoring and cost management practice.