West Midlands Housebuilding: The Completion Challenge

Posted by Colliers on 11th November 2025 -

What’s driving the housing shortage in Birmingham and the West Midlands?

Just as the UK construction industry began to stabilise following the disruption of the Covid-19 pandemic, a new set of challenges has emerged. Rising interest rates, inflationary pressures on materials, labour shortages and ongoing uncertainty around planning reform have created a difficult environment for housebuilding. Yet demand for homes remains strong.

The government’s ambition to deliver 300,000 new homes each year remains out of reach. In 2022/23, completions barely exceeded 234,000 – a shortfall that continues to push affordability further out of reach for many first-time buyers and tighten conditions for renters.

This supply gap is felt nationwide, but in the West Midlands it is particularly acute. Birmingham alone requires more than 4,000 homes annually, yet completions consistently fall short.

Why is land availability and planning reform slowing housebuilding?

A key issue is land availability. Local authorities are under pressure to prioritise brownfield redevelopment over green belt release. While brownfield delivery aligns with sustainability goals, these sites are often complex, expensive and slow to develop.
Remediation, fragmented ownership and infrastructure upgrades weigh heavily on viability. Although the West Midlands Combined Authority has unlocked sites through its Brownfield Housing Fund, the challenge remains significant. Green belt release is politically sensitive, especially around Birmingham, Solihull and Coventry.

“While brownfield delivery aligns with sustainability goals, these sites are often complex.”
 

Brownfield Land - The Property Developers' Dream or Nightmare?

From a valuation perspective, this divide is shaping land values. Premium sites with clear planning pathways and strong local demand command robust prices. In contrast, more marginal sites requiring extensive remediation or facing planning uncertainty are being marked down, widening the gap between the best and the rest.

What challenges and trends are shaping housebuilding in the West Midlands?

Labour shortages, exacerbated by Brexit, push up costs and delay delivery. Material prices remain high, and financing is more expensive due to interest rate rises. Planning reform, meanwhile, remains in flux, leaving developers hesitant to commit to new pipelines.
 

Despite these headwinds, trends like sustainability and tenure diversification are reshaping the market. The Future Homes Standard, due by the end of the year, will require new homes to produce 75%–80% less carbon emissions. This represents both a challenge and an opportunity. Developers embracing greener construction methods will be better positioned.
 

Build-to-Rent is expanding in cities like Birmingham and Coventry, attracting institutional investors. Affordable housing delivery, by contrast, remains difficult, with Section 106 negotiations often contentious. Demographic shifts are also influencing demand, with growing interest in smaller households and urban apartments.

 

What are the long-term opportunities for developers in the West Midlands?

 

In the short term, subdued delivery is likely. Developers are scaling back due to higher costs and weaker sales, while house price forecasts suggest modest declines. Yet long-term fundamentals – such as population growth, household formation and undersupply – remain strong.
 

Planning reform and targeted government intervention will be key. The transition to net zero will increasingly define future success, favouring developers which adopt energy efficient design and modern methods of construction likely to win favour with policymakers, investors and buyers alike.

“Trends like sustainability and tenure diversification are reshaping the market.”
 

In the West Midlands, opportunities like Arden Cross and Birmingham’s regeneration masterplans show ambition. But smaller brownfield plots across the region remain critical to meeting demand.
 

Housebuilding faces challenges, but also opportunity. As a RICS-registered valuer based in the West Midlands, I believe the market will reward those who adapt. Scarcity drives value – and land capable of delivering sustainable, well-planned housing is increasingly scarce.
 

For investors, developers and lenders alike, the next decade will be defined not by whether homes are built, but by how they are built, where they are built, and how well they respond to the demands of a changing society.

Please note: A version of this article originally appeared on Green Street News. This version has been adapted for the Colliers website.