Over the past few months, viability has moved from the background to the centre of every serious conversation about development. This is not simply a function of market anxiety. It reflects something more structural. Schemes that once felt self-evidently viable now require justification — and justification requires more than numbers.

What the data is telling us

The numbers are unambiguous. In 2025, just 33,000 homes were completed in London — only 37% of the 88,000 homes needed each year. Delivery has fallen 28% since 2020. The forward pipeline offers little comfort. Based on current delivery, just 14,053 homes are expected to complete across 2027 and 2028 — representing just 8% of the government's 176,000 two-year housing target.

The causes are interconnected. Construction inflation has risen sharply, up by more than 30% since 2020 according to the BCIS. Borrowing is more expensive, lender appetite is more conservative, and risk-adjusted returns are more difficult to achieve. A site that pencilled out at a 15% profit margin in 2021 now struggles to reach 8% after factoring in build cost inflation and higher financing costs.

The result, as Savills recently observed, is a London residential pipeline being eroded not by planning refusals but by viability. Across the capital, sites with residential consent or clear residential potential are increasingly being repurposed for alternative uses or retained in their existing form — representing the loss of at least 42,000 homes from the residential pipeline, of which at least 12,000 are affordable.

How selectivity changes decision making

Capital has not disappeared. It has become more disciplined. The market is functioning but selective. Viability is achievable, yet sensitive to delay and cost movement.

That selectivity changes how decisions are made. Schemes are no longer assessed in isolation. They are compared against other opportunities, other risk profiles, other management teams — all competing for the same cautious capital. Build costs for tall buildings in London have risen by up to 40% over the last five years, which helps explain why more capital is flowing into retrofit, phased regeneration and mixed-use repositioning rather than into unconstrained high-rise ambition. Scheme selection, design efficiency and timing discipline now have a much larger effect on viability than they did in lower-cost market conditions.

In that environment, the threshold for moving forward is higher and the tolerance for ambiguity is lower.

Where schemes begin to fail

This is where many schemes begin to fail. Not because the fundamentals are wrong, but because they are difficult to read. Viability is often technically sound. The appraisals stack up. The assumptions are defensible. But the information is scattered across documents that were never designed to be interrogated together, and the picture that emerges is incomplete, inconsistent or simply hard to follow.

What is increasingly visible across London is not wholesale cancellation, but non-mobilisation. Developments remain consented yet inactive, with activity limited to enabling works, early infrastructure or partial releases rather than full build-out. In several inner-London boroughs, fewer than one in four consented private schemes progressed to full mobilisation in 2025, despite stable approval volumes.

The market is not short of schemes. It is short of clearly understood ones.

The cost of friction

That creates friction. And in a more selective environment, friction is costly. When capital is cautious, anything that slows comprehension or introduces doubt becomes a factor. In funding discussions, clarity and consistency carry weight. The quality of evidence presented can materially influence confidence. Investors and funders are not looking for reasons to say no. But they will find them faster than before.

Viability on its own is no longer sufficient. It needs to be understood quickly, interrogated easily and trusted without reservation. The numbers, the risk, the return and the structure all need to be set out in a way that makes immediate, coherent sense — not just to those who built the appraisal, but to those deciding whether to back it.

Early engagement, transparent viability modelling and a willingness to explore flexible tenure options are becoming essential to unlocking schemes that would otherwise stall. The same principle applies to investor communications. Transparency is not a courtesy. It is a commercial necessity.

Viability as a case, not a calculation

When that is done well, viability stops being a calculation and becomes a case. It earns confidence rather than simply requesting it. And in a market defined by comparison and selectivity, that distinction is where decisions are made.

There is clear evidence that viable, well-prepared schemes can move — but the threshold is higher. The schemes progressing right now are those where the proposition is coherent, the evidence is structured and the communication is clear. Not because the underlying numbers are necessarily stronger, but because they are easier to say yes to.

Clarity is not a presentation problem. It is a commercial one.

McCooke Group is a specialist property PR and communications consultancy working with residential developers, investment firms and property businesses across the UK. We produce the investor communications, pitch documents and development materials that help property businesses present their proposition with clarity and credibility. Get in touch at info@mccookegroup.com