The UK land and development market has been steady rather than spectacular since our last update in May 2025. The sharp pressures of rising interest rates and spiralling inflation have eased, but the market has not snapped back into growth. Instead, developers, investors and landowners are learning to operate in a “higher for longer” environment - one where borrowing costs remain elevated, delivery risks are acute, and planning delays continue to test even the most patient operators.
Economic backdrop
Interest rates are expected to ease slowly over the next year, but borrowing is still expensive compared with the last decade. Inflationary pressures have moderated, giving some relief to households and businesses, yet the cost base for construction and compliance remains high. Lenders are selective, preferring well-located, de-risked schemes where delivery is certain.
One of the clearest signals of market fragility comes from the concrete sector. Cement production in the UK fell to 7.3 million tonnes in 2024, its lowest level since 1950. Ready-mixed concrete sales, widely regarded as a reliable barometer of housing delivery, hit historic lows in 2025, with volumes in the second quarter falling to levels not seen for decades.
Housing market trends
House prices have risen by only around one per cent over the past year, with performance split sharply by geography. Northern cities and regional centres have shown resilience, while London and much of the South East continue to be constrained by affordability. Rental markets remain under pressure, with strong tenant demand ensuring further growth, although at a slower pace than in recent years.
For land, competition remains strongest for sites with clear planning prospects and infrastructure certainty. Deals are increasingly structured to spread risk, conditional contracts, phased payments and joint ventures are now commonplace.
Policy and planning
Brownfield regeneration continues to dominate political discussion, with reports suggesting capacity for up to 1.5 million homes across England. Yet the same barriers highlighted in our 2024 update - contamination, infrastructure deficits and fragmented ownership - remain difficult to overcome.
Planning reform was meant to address these challenges, but developers still face under-resourced local authorities, inconsistent decisions and long determination periods. This remains the single biggest brake on housing supply.
The government’s plans to reposition Homes England as a form of “housing bank” could play a more active role in unlocking sites, particularly for smaller developers.
Looking ahead
The lesson of the last two years has been that resilience and adaptability matter more than optimism. In today’s market, a solid exit strategy is critical: knowing not just how to secure land, but how to deliver or dispose of it profitably in a volatile planning environment. Developers who can remain flexible in their approach will be best positioned to manage risk and capture opportunity as conditions evolve.
Small and medium-sized enterprises (SMEs) should, in theory, play a pivotal role in bridging the gap left by more cautious national housebuilders. However, many SMEs are not currently well placed to step up. Access to finance remains a major constraint, competition for land is intense, and navigating the planning system is particularly burdensome for smaller operators. Without additional government support and a more flexible approach to land release, their potential will remain underutilised. With the right backing, SMEs could provide the agility, local insight and delivery pace needed to turn consented or allocated sites into much-needed homes.
Conclusion
The year ahead is unlikely to deliver dramatic growth, but it does offer opportunities for those who are prepared. Strategic site assembly, strong relationships with planning authorities and communities, and pragmatic delivery models will be essential. For landowners and developers alike, success will not come from waiting for conditions to change dramatically, but from working effectively within the market as it stands.
