New insights from Cobalt Recruitment’s Development Index 2026 paint a picture of a development sector entering the year with tentative optimism, even as long‑standing structural challenges continue to slow progress. Drawing on interviews with senior leaders across major developers, housebuilders, REITs and investment firms, the Index highlights a market that is slowly stabilising after a subdued 2025, but one still defined by planning delays, viability pressures, and skill shortages.
For housebuilders, property developers, and estate agents, the findings set the tone for a year in which progress feels possible, but never guaranteed.
Improving Sentiment Meets Lingering Uncertainty
Across the sector, confidence heading into 2026 is markedly stronger than last year. Softening finance terms and the prospect of further interest rate reductions are helping rebuild confidence among developers and lenders.
At the same time, anticipated clarity around the National Planning Policy Framework offers hope that policy uncertainty, which has hindered project sequencing throughout 2025, may soon ease.
Yet, this optimism remains fragile. Many firms are still constrained by the after‑effects of slowed market activity, cautious lenders, and uneven buyer demand.
Planning Barriers Continue to Restrict New Supply
One of the clearest themes emerging from the Development Index is the ongoing struggle with planning system delays. Developers report prolonged timelines, slow determinations, and inconsistent decision‑making from local authorities. These challenges continue to act as a critical brake on housing delivery.
For housebuilders, this translates into:
- Extended pre‑construction periods
- Greater exposure to fluctuating costs
- Slower release of build‑ready plots
For estate agents, these delays keep new‑build stock constrained, maintaining pressure on the resale market to meet local demand.
Viability Remains Under Strain
The Development Index highlights a persistent set of viability pressures that continue to reduce the number of projects able to progress to site. Rising build costs, lender caution, and a shortage of schemes meeting feasibility criteria all play a part.
Developers also flag:
- Tightened margins, especially on regeneration or mixed‑use schemes
- Limited access to suitable lending products
- End‑occupier and buyer shortages affecting sales forecasts
As a result, many housebuilders are expected to favour simpler, lower‑risk sites through 2026. More complex land opportunities may remain paused until economic and policy conditions stabilise.
Skills Shortages: The Sector’s Sharpest Constraint
Perhaps the most pressing issue highlighted in the Index is the continued shortage of skilled professionals across planning, land, design, technical and delivery roles.
The industry is experiencing a growing need for:
- Planners and technical leads with regulatory fluency
- Specialists in sustainability, ESG compliance, and retrofit
- Professionals with strong digital skills, particularly in AI‑driven appraisal and design tools
These shortages directly impact delivery speed, pricing certainty, and team capacity, key factors influencing build‑out rates for housebuilders and the broader residential sector.
Regeneration Continues to Outpace Newbuild Starts
Another major shift highlighted in the Index is the dominance of regeneration and refurbishment, which now represent more than four‑fifths of active schemes.
This shift is reshaping the development landscape:
- Regeneration areas are emerging as key hotspots for estate agents
- Refurbishment demands specialist capability, lengthening delivery times
- Complex regulatory and sustainability requirements slow early‑stage design
The trend suggests that regeneration, not large‑scale expansion, is likely to drive much of the UK’s housing activity in the near term.
Ambition Outstripping Capacity
Despite encouraging signs, the Development Index makes clear that the gap between ambition and capacity remains wide. Economic pressures, planning complexity, and staffing shortages continue to undermine developers’ ability to deliver at scale.
For housebuilders and residential market stakeholders, this means:
- Build programmes will remain tightly managed
- Starts may increase, but not rapidly
- Supply constraints will continue to influence pricing and buyer behaviour
Estate agents can expect ongoing pressure on stock levels, although demand, particularly in regeneration zones, should remain resilient.
What This Means for Our Readers
For those using Housebuilder Pro to manage projects, sales, and aftercare, the findings underscore the importance of:
- Strong workflow and project controls to counteract planning delays
- Accurate forecasting and financial reporting in a tight viability climate
- Streamlined communication across stretched teams
- Clear customer and agent updates when supply is limited and timelines are sensitive
As 2026 unfolds, the environment may be improving, but efficiency, visibility, and resilience remain the differentiators.
