BLOGS

A pipeline under strain

A new sector report has added weight to a warning that has circulated among housebuilders for over a year: the government's target of 1.5 million new homes by the end of this parliament, with 2026 acting as a critical staging post, is increasingly unlikely to be met on current trajectories. The report points to three compounding pressures — development finance that remains expensive relative to the pre-2022 era, planning determination times that continue to lag statutory targets in many local authorities, and a skilled labour shortage across trades from bricklaying to quantity surveying.

None of these pressures are new individually. What has changed is how they are now reinforcing one another. Higher financing costs squeeze scheme viability, which pushes developers to renegotiate section 106 obligations or phase schemes more cautiously, which in turn lengthens time in the planning system and delays the point at which units convert from consented pipeline into sold or let stock. REalyse pipeline and transaction data lets us see exactly where in that chain the blockages are forming.

Where planning approvals are and aren't converting to units

Looking at residential planning decisions across England, Scotland, Wales and Northern Ireland over the past two years, the regional disparity in both volume and refusal exposure is stark. The South East and London have generated the largest raw pipelines of granted units — over 165,000 and 133,000 units respectively across housing-related consents — but London also carries by far the highest refusal rate relative to its granted volume, with roughly one refused application for every 1.6 granted. That ratio is markedly worse than the South East, where refusals run at closer to one for every 2.4 grants, or the East Midlands, where the ratio is closer to one in 3.4.

This matters for underwriting. A borough with a high refusal rate isn't just slower to build in — it signals higher pre-application risk, longer holding periods on land, and greater sensitivity to scheme design and affordable housing negotiations. For lenders assessing development finance applications, and for investors screening land opportunities, REalyse's ability to benchmark a specific local authority's granted-to-refused ratio against regional and national norms is becoming a standard part of site appraisal, not an afterthought.

Regional supply gaps are not evenly distributed

Scotland and Northern Ireland show comparatively low refusal exposure (roughly one refusal for every six to thirteen grants), suggesting planning risk is currently more contained outside the most land-constrained parts of England. But lower refusal risk doesn't automatically translate into stronger delivery — smaller absolute pipelines in both markets mean any localised financing or contractor capacity issue has an outsized effect on regional supply. This is a reminder that "planning risk" and "delivery risk" are related but distinct metrics, and a report focused purely on refusals could understate supply risk in thinner markets.

Completions are already showing the strain

Planning data shows where the pipeline is being built up or blocked; transaction data shows where it is actually landing as delivered stock. Here the picture is more concerning for 2026 target credibility. REalyse transaction data shows new-build sales volumes falling sharply from 2024 into 2025 across every English region and Scotland — London's new-build transaction count roughly halved year-on-year, and similar-scale declines appear in the North West, South East and Yorkshire and the Humber. Early 2026 figures are thinner still, though this partly reflects the normal two-to-six month registration lag in Land Registry price-paid data rather than a complete stop in activity.

Price per square foot for new-build stock has been comparatively resilient by comparison, holding broadly flat or drifting only slightly in most regions between 2024 and 2025 — London is the notable exception, where average new-build £/sqft eased from the mid-£900s to the low-£800s, consistent with softer buyer demand for higher-value new-build product amid affordability pressure and higher financing costs for purchasers. For developers, that combination — falling volumes with only modestly softer pricing — points to a demand-and-delivery problem rather than a straightforward price correction, and is consistent with the sector report's framing of viability strain rather than a collapse in underlying values.

What this means for investors, lenders and developers

Taken together, the planning and transaction data support the sector report's central claim: 2026 delivery risk is real, but it is not uniform. Development finance providers assessing new facilities should weight local authority-level approval history and regional completion trends alongside standard GDV and cost stress-testing, rather than relying on national housebuilding statistics alone. Investors screening land and consented sites can use granted-to-refused ratios and completion velocity as an early filter for where planning risk is genuinely elevated versus where a pipeline is simply smaller in absolute terms.

For housebuilders and developers, the data reinforces a case for phased, flexible scheme design in regions showing higher refusal exposure, and for closer monitoring of absorption rates in areas where new-build transaction volumes have fallen furthest. Agents advising vendors and landlords in new-build-heavy markets should also expect softer new-build turnover to filter into local comparables over the coming quarters.

Outlook

None of this points to a sudden housing market shock — the moderate pricing resilience in the data argues against that. But it does suggest that closing the gap between consented pipeline and delivered homes will require more than planning reform alone; financing conditions and labour capacity need to ease in parallel for the 2026 ambition to come back within reach. REalyse's planning, land and transaction data will remain the clearest early indicator of whether that alignment is happening, region by region, well before national completion statistics catch up.