Britain is flatlining, what’s going wrong?

The government's number one mission is growth, and the Planning and Infrastructure Act is the clearest signal yet that it means it. But as the latest economic data is released, the gap between ambition and delivery is widening. 

New GDP figures published today by the Office for National Statistics (ONS) show the UK economy grew by just 0.1% in the final quarter of 2025, missing expectations. Construction was the weakest major sector, with output falling 2.1% over the quarter - its worst performance in four years. The ONS confirmed that the decline reflected fewer new projects being started alongside reduced repair and maintenance activity. 

These are not the numbers of a country on track to deliver 1.5 million new homes over this Parliament. 

The housebuilding sector is feeling the strain. Britain's largest housebuilder, Barratt Redrow, reported a 14% fall in adjusted pre-tax profits in its latest results, down to £199.9 million from £231.4 million the year before. The group pointed to build cost inflation and increased use of sales incentives eating into margins, with house price growth offering little in the way of offset. 

Its chief executive, David Thomas, warned that full-year targets remain dependent on a strong spring selling season, while flagging the risk of disruption from both the spring statement and May's local elections, which typically see planning committees delay decisions on larger schemes. "There's a lot of stuff going on," Thomas said. "In terms of local elections, we would typically see delays to planning committees, which don't necessarily want to approve particularly larger projects in the run up to an election." 

Sales rates have shown modest improvement since the turn of the year, up to 0.59 homes per site per week from 0.55 in the second half of 2025 but remain slightly down on the year. Between July and December, the group completed 7,444 homes, 5% more than the same period in 2024, partly boosted by buyers rushing to complete before the April stamp duty increase. 

Net additional housing in England fell to 208,600 in 2024/25, down 6% on the year. New build completions have dropped to their lowest level in nine years. Housing starts remain 57% below their mid-2023 peak. In London, construction starts for build to rent collapsed by 80% in 2025. 

The Chartered Institute of Housing has warned the government is likely to miss its target by around 25%. The National Housing Federation puts the potential shortfall even higher. 

Much of the debate focuses on familiar obstacles: elevated mortgage rates, stubborn build-cost inflation, regulatory delays at the Building Safety Regulator, and a planning system that remains underfunded and overstretched. But the problems run deeper. 

Analysis by Zoopla found that housebuilding is financially unviable in half of England's local authorities. In areas where it is viable to build, buyers often cannot afford to purchase. Where homes are affordable, the economics of development do not stack up. 

This is the structural impasse that planning reform alone cannot resolve. 

First-time-buyer demand is faltering. Smaller housebuilders - those outside the top ten - have seen completions fall by over a third since 2021, squeezed by the cost of land, planning delays, and the weight of regulatory obligations from Section 106 contributions to biodiversity net gain requirements. The building safety levy, due to come into effect in October 2026, will add further costs to development. 

The Planning and Infrastructure Act will streamline decision-making and restore mandatory targets, both long overdue. But without aligned policy, viable land economics, and sustained investment in local authority capacity, the machinery needed to turn ambition into delivery simply is not there. 

For developers, investors, and the communities that stand to benefit from new housing, the question is no longer whether the government wants to build, but whether the government is able to create the conditions to let them. 

The Planning and Infrastructure Act is a necessary step. But planning reform cannot deliver homes on its own. It needs to be matched by a fiscal and regulatory environment that makes development viable, not one that punishes the businesses expected to deliver it. Since taking office, this government has introduced the largest tax raising budget on record and pushed the overall tax burden toward its highest level in modern British history. This is not a platform for growth.