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Savills has warned that small to medium-sized (SME) housebuilders face “an existential threat to their survival” as the result of a 41% drop in home sales since the Covid pandemic.
According to a Savills report published today (9 March) for the Land, Planning and Development Federation (LPDF), average sales per outlet for builders completing 500 to 1,000 homes per year have fallen from 33 homes per year in 2021 to just 19 in 2025.
The South East has seen the most acute drop, with the smallest builders’ sales rates having halved since 2022 to around 0.2 sales per week in that region.
Completions by housebuilders outside the top 50 in the sector have fallen 38% from their pre-pandemic peak, with the smallest firms experiencing renewed declines in 2025.
The report calls on government to create a targeted equity loan scheme focused on first-time buyers. Savills claims around 375,000 family households living in the private rented sector could afford to buy a new home with the support of an equity loan if they have a 5% deposit.
It added if such a scheme were launched in spring it could support up to 85,000 additional home completions by March 2029 and generate nearly £24bn in additional GDP over three years.
The LPDF warned that without government intervention to stimulate demand, capacity in the SME sector will be “permanently lost”.
It added this will also undermine the government’s 1.5 million new homes target, as well as the recently published Office for Budget Responsibility forecast, which predicted that net annual additions to housing stock will fall to a low of 220,000 in 2026-27, before rising to over 305,000 by 2030-31.
LPDF chairman Paul Brocklehurst said the report confirms that many SME housebuilders are “operating at sales rates that are simply not viable in the short as well as medium term”.
He added: “These businesses are vital to competition, consumer choice, local employment and delivery across a wide range of sites. Without targeted demand-side support, we risk losing a generation of SME builders and with them the capacity needed to meet the country’s vital housing ambitions.”
Chris Buckle, director of residential research at Savills, said: “Housebuilder sales rates have shown little sign of recovery since our last report for the LPDF in October 2025 and, with no form of demand side support for new homes forthcoming in the Autumn Budget, housebuilders are continuing to use financial incentives to plug gaps in demand.
“Without a boost to demand in the very near future, the industry capacity will be lost that supported 150,000 new homes sales and 220,000 total completions between 2019 and 2022.”
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