How housebuilding has evolved over 10 years

The impact goes beyond land use. For example, sites that might have previously accommodated 200 units may now only deliver 150 because SANG takes up area that could otherwise be developed.

When you’re trying to make scheme economics work while meeting affordable housing requirements, losing 25% of your units can create serious problems. Something has to give, and it’s often the affordable housing percentage that gets negotiated down.

Gas boilers have essentially vanished from new build specifications. The shift to air source and ground source heat pumps represents one of the most visible changes in how homes are built. Initially, these systems were expensive and unfamiliar to both builders and buyers, but competition has increased and costs have come down, though they’re still pricier than traditional gas systems.

“Developers have shifted toward standard house types rather than bespoke designs for individual sites”

More significantly, though, they’ve changed how developments are designed. Heat pumps work best in well-insulated properties, which means higher specifications throughout. While that will benefit residents in the long term through lower running costs, it also increases upfront build costs at a time when development economics are already stretched.

Developers have shifted toward standard house types rather than bespoke designs for individual sites. The reasoning is simple: standard types build faster and cheaper, workmen know the layouts, materials can be ordered in bulk and returns come quicker.

This affects what housing associations receive through Section 106. The variety of housing types has narrowed and design flexibility has reduced. Some argue this creates more homogeneous developments, though others counter that consistency in build quality matters more than architectural variety.

Some sites purchased 10 years ago are only now reaching delivery, and that time lag has created real problems. At the time, land was acquired based on assumptions about construction costs, interest rates and regulatory requirements that no longer apply. What may have looked viable in 2015 often doesn’t stack up now.

This hits affordable housing delivery directly. When developers demonstrate through viability assessments that schemes can’t support policy-compliant affordable housing percentages, Section 106 negotiations become protracted.

Planning authorities understandably push back, but the economics are what they are. Unfortunately, the result is often either reduced affordable housing or schemes that don’t proceed.

“Properties with strong sustainability credentials have lower running costs, which benefits residents. But achieving those standards increases development costs”

Buyer expectations regarding sustainability have shifted significantly as well. Eco credentials matter in ways they didn’t before. Developers respond by pursuing zero-carbon aspirations, incorporating renewable energy and maximising energy efficiency. These aren’t just marketing points – they’re increasingly essential for schemes to compete.

For housing associations, this creates both opportunities and tensions. Properties with strong sustainability credentials have lower running costs, which benefits residents. But achieving those standards increases development costs, affecting what housing associations can afford to pay for Section 106 units. This tension between higher quality and affordability hasn’t yet been resolved.

The cumulative effect is that housing delivery has become more complex and more expensive. Each rule looks manageable on its own, but stack them together and they completely change whether projects work financially. When budgets get tight and schemes struggle to add up, affordable housing usually takes the hit.

Housing associations and councils buying new homes need to grasp what’s happening here. The development landscape has evolved considerably, and those changes affect what gets built, how much it costs and ultimately how much affordable housing the system delivers.

Recognising that context helps inform realistic expectations about what’s achievable and how to structure agreements that actually deliver homes rather than stalling in endless negotiations.

Tim Foreman, land and new homes group managing director, LRG