Britain’s housing ambitions are colliding with a stark economic reality: across much of the country, it is becoming harder and harder to make building new homes financially stack up. The government’s target of 1.5 million new dwellings over the next Parliament was meant to address decades of undersupply, yet developers are warning that the numbers simply do not add up. Schemes that once looked viable are being paused or abandoned altogether, not for lack of demand, but because the costs of land, construction, finance and regulation increasingly outweigh the value of what can be sold.

In the housebuilding sector, “viability” describes whether a project can generate sufficient return once all those costs are factored in. When the total cost of delivery exceeds the likely market value, the scheme is deemed unviable, and, as growing numbers of developers attest, that is now the rule rather than the exception. Even at today’s high sale prices, new homes frequently cannot be delivered viably, creating a widening gap between the government’s political aspirations and market reality.