The Viability Crunch – What it Means for Development in 2026

The latest HBF Viability Report highlights a growing challenge for the residential sector, the cumulative impact of policy, regulation and cost inflation is fundamentally reshaping development viability across the UK. [hbf.co.uk]

Key takeaways from the report are:

• Since 2020, additional costs from policy changes, taxes and inflation have added around £76,000 per unit – roughly 20% of average house prices.
• Viability rapidly shrinking

Development is now financially viable in just over a third of local authority areas, with nearly half of England facing unviable conditions.

Major contributors include:

• Materials & labour inflation (+£37,000 per home).
• Future Homes Standard (+£10,200).
• Nutrient neutrality (+£7,000).
• Biodiversity Net Gain (+£5,700).
• Building regulations and new levies.

These costs are cumulative and often unpredictable. Planning reform alone won’t solve delivery

Even with positive changes to the NPPF, viability, not just planning remains the key constraint on housing supply and marginal sites are slipping away.

The assumption that land values can continue to absorb cost increases is no longer holding risking stalled sites and reduced housing delivery nationwide.

Why This Matters for Developers and Landowners

In this environment, strategy, timing, and expert advice are more important than ever.

Viability is no longer a static appraisal – it’s a moving target influenced by policy shifts, local requirements, and market conditions. Getting it wrong can mean the difference between consent and refusal, or delivery and delay.

At Berrys, we work closely with developers, promoters and landowners to:

• Undertake detailed development appraisal and due diligence of sites.
• Ensure heads of terms are well considered and negotiated commercially.
• Navigate complex and evolving planning requirements.
• Optimise site promotion and planning strategies.
• Engage effectively with local authorities on policy and contributions.
• Unlock sites that might otherwise be considered ‘marginal’.

Our experience across a wide range of sites and service areas means we understand how to balance competing policy demands while maintaining deliverability.

If you’re reviewing your pipeline or considering new opportunities, now is the time to sense-check viability and strategy. Please get in touch with our planning and development team to see how we can help:

PJ Triplow (Shrewsbury) 01743 271697

Lauren May (Kettering) 01536 412464

Kirsten Sloth Nielsen (Towcester) 01327 356140

Immy Platt (Hereford) 01432 809830