Britain’s housebuilders are struggling, new figures have revealed, opening up potential bargains for some buyers.
As of September this year, 12,904 housebuilders were either in administration or in the process of being wound up, according to analysis of Companies House data by estate agent Hamptons.
It is 4,994 or 63 per cent higher than in September 2022, and 240 per cent higher than in September 2019, highlighting the growing pressure on the sector.
In total, the number of housebuilders currently trading fell by 1,507 in the year to September 2025 – the first annual decline in at least a decade.
While fewer housebuilders could result in less homes being built in the long run, and potentially higher house prices, there are deals to be done on new build homes at the moment.
Reality check: Nearly three-quarters of housebuilders going out of business this year had been set up during the Help to Buy years
Rob Dix, co-founder of Property Hub, which finds buy-to-let properties for landlord clients, says conditions are perfect for his business at the moment.
‘It’s well worth trying to negotiate a discount on new builds,’ he says. ‘There are times in the market when you’d be wasting your time, but now it’s worth knowing you’ve got the upper hand and pushing for the best deal you can get.’
He says he is negotiating a level of discounts he ‘hasn’t seen for years’ as conditions for housebuilders are tough and they are keen to sell.
‘Even when they need to protect their pricing we’re finding them open to throwing in extras,’ he adds.
Extras offered by housebuilders commonly include things like furniture, upgraded kitchen units or flooring, cashback, or paying the buyer’s stamp duty.
Dix says he has also persuaded developers to reduce their usual deposit requirements. Often for off-plan new-builds, they will want a deposit of 15 per cent or more – but he has agreed a deal at just five per cent.
Builders struggle post-Help to Buy
The wider housing market is sluggish at the moment due to a range of factors including affordability challenges, an uncertain economic outlook and worries about potential tax changes in the Autumn Budget.
However, according to Hamptons’ lead analyst David Fell, the new-build market has struggled since the Help to Buy scheme came to an end in 2023.
The Help to Buy scheme was designed to help first-time buyers on to the property ladder with the Government lending between 5 and 40 per cent of the cost of in order to boost buyers’ deposits.
David Fell, lead analyst at Hamptons says the drop in housebuilder numbers marks a departure from the Help to Buy-fuelled boom years
The caveat was that they had to buy a new-build home, which in turn gave developers a huge boost.
‘While Help to Buy created thousands of new homeowners, it also created a generation of new housebuilders,’ said Fell.
‘But the evidence is starting to suggest that many of these businesses are struggling to maintain momentum in a post Help to Buy world.
‘Rising mortgage rates and construction prices have dampened demand while pushing up the cost of building.’
Falling house prices in parts of the south east have also made it harder to turn a profit, he added.
Help to Buy ran in two phases between 2013 and 2023 with the number of new housebuilders set up peaking at 20,000 in the year to September 2022.
Nearly three-quarters of housebuilders going out of business this year had been set up during the Help to Buy era, according to Hamptons.
As a result, the average housebuilder’s life expectancy has fallen to just 9.8 years, a figure that has steadily decreased as the number of developers going out of business has risen.
Only around 5 per cent of housebuilders currently trading were set up before 2000, typically the largest ones.
Fell added: ‘Housebuilding requires significant upfront investment, buying land, sourcing materials, hiring labour – all before a single brick is laid.
‘And when the home is finally sold, often a couple of years later, it needs to fetch a price that makes the venture worthwhile.
‘That model works well when prices are rising, but when falling, it can quickly become unprofitable.’
What does it mean for Labour’s homes target?
It comes at a time when the Labour Government has pledged to build 1.5 million homes by the end of this parliament in 2029.
Only 38,780 new homes were completed between January and March this year, according to the Office for National Statistics – just over half the amount needed in every three-month period to meet the target.
Meeting the 2029 goal would require around 300,000 homes to be completed each year, or 75,000 every three months.
Earlier this month, Jo Eccles, founder and managing director at property search company, Eccord, told This is Money it’s looking very unlikely that the Government will get close to its 1.5 million target.
‘The planning system is incredibly slow, construction costs are up almost 30 per cent and first time buyers are being held back by affordability constraints,’ she said.
‘Private developers will only build what they can sell at a decent profit margin, and if they can’t be confident of that, they will sit on land until they are.’
