BLOGS

The UK's post-Grenfell building safety overhaul is now firmly embedded in the planning and development process—and the data shows a residential pipeline under significant pressure. From the Building Safety Act 2022's gateway system to new second staircase requirements for taller buildings, developers face a fundamentally changed regulatory environment that is reshaping what gets built, where, and by whom.

REalyse planning data reveals a sharp contraction in residential planning activity since the major safety reforms took effect, with larger developments bearing the brunt of heightened scrutiny and compliance costs.

A shrinking planning pipeline

The numbers tell a stark story. In England, residential planning applications receiving decisions fell from approximately 22,800 in 2022 to around 13,300 in 2025—a decline of more than 40%. The total number of residential units in determined applications has nearly halved over the same period, dropping from roughly 416,000 units in 2022 to approximately 211,000 in 2025.

Meanwhile, approval rates have softened. In 2022, around 73% of residential applications were approved; by 2025, this had slipped to just under 70%. The corresponding refusal rate rose from approximately 27% to over 30%.

While multiple factors contribute to planning slowdowns—including interest rate rises, construction cost inflation, and local authority resourcing challenges—the timing aligns closely with the phased implementation of building safety requirements under the Building Safety Act and subsequent regulatory updates.

Larger schemes face steeper headwinds

The impact is most pronounced for larger developments, which face the fullest weight of new safety obligations. For schemes of 10 or more units in England, REalyse data shows:

• Application volumes down sharply: The number of larger residential applications receiving decisions fell from around 3,800 in 2022 to approximately 1,480 in 2025—a drop of over 60%.

• Approval rates declining: Approval rates for these larger schemes fell from approximately 82% in 2022 to just under 75% in 2025.

• Refusal rates climbing: Refusals rose from roughly 18% to over 25% over the same period.

• Unit pipeline contracting: Total units in larger scheme applications halved, from approximately 361,000 in 2022 to around 181,000 in 2025.

These larger developments are precisely those most affected by the Building Safety Act's gateway regime—particularly schemes involving higher-risk buildings over 18 metres. The Act introduced three regulatory gateways that developers must pass before starting construction, during construction, and prior to occupation. Each gateway requires detailed documentation on fire safety, structural integrity, and building control sign-off from the Building Safety Regulator.

The second staircase effect

From late 2023, the government confirmed that all new residential buildings over 18 metres must include a second staircase—a requirement that adds significant cost and complexity to scheme design. For many projects already in pre-application or early planning stages, this triggered fundamental redesigns or, in some cases, scheme abandonment.

Industry bodies including the Home Builders Federation have noted that second staircase requirements can reduce net sellable area by 5–10% on affected buildings, eroding development margins at a time when construction costs remain elevated. For schemes on the cusp of viability, this additional burden has contributed to project withdrawals and reduced land bidding activity.

REalyse market intelligence suggests that developers are increasingly pivoting to sub-18 metre schemes or mid-rise development typologies to avoid triggering the most onerous safety requirements—a trend visible in shifting scheme sizes and unit mixes across urban regeneration areas.

What this means for housing supply

The cumulative effect of these regulatory changes is a meaningful constraint on future housing supply. With fewer large-scale schemes entering the pipeline and approval rates softening, the volume of new homes reaching completion over the coming years will likely fall short of government targets.

The government's stated ambition to deliver 300,000 homes per year in England increasingly depends on unblocking the planning system and providing clearer guidance on building safety compliance. Recent announcements around planning reform, including proposals to streamline approvals and support local authority capacity, attempt to address part of this challenge—but do not directly ease the cost and complexity burden that building safety compliance places on larger developments.

For lenders, investors, and developers, understanding how these regulatory dynamics interact with local market conditions is essential. REalyse planning and pipeline data enables users to track scheme progress, identify where refusals are concentrated, and benchmark project characteristics against local approval patterns—providing the intelligence needed to navigate a reshaped development landscape.

Outlook

Building safety reform is a necessary response to the Grenfell tragedy and longstanding industry failings. However, the scale and pace of regulatory change has created real friction in the development process, contributing to a contraction in the residential planning pipeline that will take years to work through.

As the Building Safety Regulator beds in and developers adapt their approaches, we expect some stabilisation in approval rates for compliant schemes. However, the structural shift toward lower-rise and mid-rise development typologies—and away from the largest, most complex urban projects—may prove lasting. For those tracking UK housing delivery, the next 12 to 24 months will be critical in determining whether regulatory reform and market conditions can align to rebuild pipeline momentum.