"The question is, how do we empower developers to build again with confidence? The vital thing is to have access to comprehensive data that allows them to do their homework and ensure a project is viable"
- Ross Allan - Hometrack
Hometrack has highlighted the role of data in helping housebuilders navigate the financial challenges of developing new homes. A recent Zoopla report found that building new homes is not financially viable across nearly half of England, with 48% of areas affected. Hometrack suggests that while government reforms remain essential, developers and housing associations can use regional property and affordability data to better assess project risks and make informed decisions.
The Zoopla report, titled “The viability gap,” shows that housebuilders are facing soaring delivery costs, up 17% since 2022, while sales prices have risen by only 1% over the same period. It also reveals an “inverse relationship between viability and home buyer affordability - in affordable areas it’s harder to build homes; where development is viable it is harder to buy.”
While policy action is recommended, Hometrack emphasises that using advanced data analytics allows housebuilders to move beyond anecdotal evidence. The approach improves the ability to quantify market opportunities, evaluate investment risk, and make decisions on tenure mix, pricing, and value creation.
This data-led strategy was demonstrated in a project with housing association BPHA, which is exploring the regeneration of three 1960s tower blocks in Bedford town centre. BPHA used Hometrack’s Data Services to assess a target sales value, providing a robust evidence base by:
Benchmarking proposed values – The data showed that while the target was at the higher end of the local new-build market, it aligned with regional averages and remained significantly more affordable than nearby Cambridge or Oxford, where 63% and 70% of residents cannot afford the average home. This highlighted potential to attract spillover demand.
Examining the development pipeline – Insights into other active projects helped contextualise competition and potential market saturation.
Optimising the housing mix – Analysis revealed that sale prices for local new two-bed flats were up to 22% higher than initial developer estimates. This indicated that demand for larger flats was underestimated, offering an opportunity to adjust the housing mix and maximise sales values.
The assessment concluded that the proposed values were “punchy but achievable,” giving BPHA confidence in the project’s viability and potential funding gaps.
Ross Allan, managing director of Data Services at Hometrack, comments, “The findings from Zoopla’s report are stark and lay bare the realities facing the housebuilding sector. While we support the call for long-term policy reform, the industry cannot afford to stand still, particularly with both affordable and private housing starts down significantly in recent years.”
He added: “The question is, how do we empower developers to build again with confidence? The vital thing is to have access to comprehensive data that allows them to do their homework and ensure a project is viable. The Bedford project is a perfect example of how granular, real-time data on everything from local pricing and demand dynamics to the development pipeline can replace uncertainty with clarity, contributing to the delivery of the homes we so desperately need.”
