Winckworth Sherwood’s Lindsay Garratt on why viability remains a big housing challenge

Some of these legislative changes are significant and are expected to have a positive impact in the long term. However, the scale of the current challenge for housing delivery is stark. Newly released data for Q3 2025 shows housing starts are 57% below their previous peak in Q2 2023, highlighting just how far the sector has fallen behind.

Other familiar challenges remain: geopolitical uncertainty, high build costs, poor affordability for consumers and regulatory change – particularly around building safety – all continue to hit project viability.

Securing consent from councils has rightly been identified as a major blocker, leading to an announcement in November that planning applications for schemes of more than 150 homes would be escalated to the desk of the housing secretary if the local authority was minded to refuse them. This is a welcome prospect, but only if it genuinely speeds up decision-making rather than creating a backlog elsewhere.

The question of capacity is a problem across the planning system. Whether in government, the Planning Inspectorate or local councils, a lack of resources continues to stall progress.

There is renewed interest in implementing Section 73B, introduced through the Levelling-up and Regeneration Act 2023, which would allow material variations to existing planning permissions, provided they are not “substantially different”. This move might help unlock some schemes where current workarounds to make changes are not agreed by the local authority.

The government has also announced changes to the biodiversity net gain regime, exempting sites under 0.2ha. A targeted exclusion for brownfield land more widely would further improve viability on sites in urban areas.

Emergency measures introduced in London at the end of last year, including temporary reductions in affordable housing thresholds and Community Infrastructure Levy contributions, will also support the viability of some schemes in the capital. Similar measures should be considered by authorities elsewhere.

Dealing with delays

Labour’s decision to scrap plans to replace Section 106 with a new Infrastructure Levy was broadly welcomed by an industry concerned about further complexity and delay. That said, delays have crept in anyway, driven largely by the inability of registered providers to take up S106 homes due to financial constraints and other concerns.

The government’s recently launched S106 roadmap included a short-term measure to unlock ‘legacy’ uncontracted affordable homes. Eligible units include those that developers have previously been unable to sell and that are due for completion by the end of next year. Where conditions are met, alternative S106 provision – including potentially offsite or payments in lieu – may be agreed.

While welcome, developers will need to move quickly to take advantage of this.

The government is also looking at streamlining S106 negotiation more generally. It remains to be seen what this entails, although standardising drafting for sites under 50 homes should help shorten the negotiation process.

Developers want to deliver and are increasingly exploring innovative ways to improve viability and move schemes forward. Strategic partnerships – combining legal, financial and technical expertise – are emerging as one of the more effective routes through current market conditions. While not taken on lightly, they offer a way to share risk and unlock delivery in a high-cost, highly regulated environment.

Homes England has announced several high-profile investment partnerships with banks, investors, developers and registered providers, while many local authorities are adopting similar models. Others, including Places for London and National Rail, are exploring how surplus land and infrastructure assets can be used to deliver housing.

What these alliances share is a determination to make the best use of land and respond to the housing emergency despite the headwinds. The government’s planning reforms provide an important backdrop, and there is a strong appetite across the sector to get going again. Hopefully, 2026 will bring the certainty and confidence needed to do just that.

Lindsay Garratt is a partner at Winckworth Sherwood