BLOGS

A pipeline that looks healthier than it is

England's planning system is processing more housing ambition than it has in years. Planning Portal data shows applications for 335,000 new homes were lodged outside London in 2025 alone — the strongest year since 2020 — with the final quarter up 61% year-on-year. Momentum has carried into 2026: in the year to June, permission was sought for over 412,000 new homes, with every region outside London recording growth.

On paper, this is exactly what the Planning and Infrastructure Act 2025 and the revised National Planning Policy Framework were designed to achieve. Mandatory local housing targets, the release of "grey belt" land, and faster committee processes have visibly changed developer behaviour. The average number of homes per application has nearly doubled, from 6.8 units in Q1 2024 to close to 13 by mid-2026, pointing to larger, more strategic sites coming forward rather than a proliferation of small infill schemes.

But a five-year high in applications is not the same as a five-year high in homes being built. The gap between what is submitted and what is completed is where the real story of this reform cycle sits — and it is a gap that matters intensely to anyone underwriting UK residential exposure today.

Applications up, starts and completions still lagging

The delivery-side numbers tell a more sober story than the submissions headline suggests. Housing starts across 2025 totalled around 150,000 — far below the volume of applications now moving through the system, and consistent with a pipeline that is thickening at the front end without a matching acceleration at the back end.

Net additional dwellings in England came in at roughly 208,600 in 2024/25, a 6% decline on the prior year and well short of the ~300,000 annual rate implied by the 1.5 million homes target. Completions in Q2 2025 fell to around 35,000–36,000 — down close to a fifth year-on-year and around a quarter below pre-pandemic norms. By some estimates, less than a fifth of the parliament's headline housing target had been delivered by late 2025, despite over a quarter of the parliamentary term having elapsed.

REalyse's planning pipeline data shows the average lag between permission granted and construction start has lengthened across most English regions over the past two years — the opposite of what reform is meant to achieve. For institutional lenders and developers, this lag is the critical underwriting variable: a scheme with permission today may not break ground for 18–24 months, and viability conditions can shift materially in that window.

Why the conversion rate is the real metric

Historically, roughly 90% of applications are approved and around 70% of approved schemes convert to a completed home — implying a long-run conversion rate near 63%. At that rate, hitting 300,000-plus annual completions would require close to 45,000 applications a month. England is running at under half that pace.

Crucially, much of the current surge is concentrated in outline applications rather than full applications — and outline permissions historically convert to completed homes at a materially lower rate. Grey belt and other strategic sites are also sitting in planning limbo for longer: REalyse data shows approval rates on decided applications holding broadly stable at 65-69%, but a rising volume of undecided, large-unit applications that could extend delivery timelines by 12–24 months or more, tying up developer capital without adding to completions in the near term.

Regional divergence: London's collapse versus the growth corridors

The national headline masks a sharp geographic split that matters for anyone allocating capital by region. Every English region outside London recorded a rise in applications through 2025 and into 2026 — but London saw applications fall by almost a third, back to levels last seen in 2023. Private housing starts in the capital more than halved in H1 2025, with completions down around 12% year-on-year, a pattern driven by Building Safety Act requirements, high affordable housing quotas and weak sales absorption rather than by planning appetite.

By contrast, growth corridors such as Kent, Greater Manchester, Essex, Hertfordshire and parts of the East of England and South East are showing the deepest pipelines by unit count, alongside comparatively stronger approval rates — Cambridgeshire and Oxfordshire, for instance, have posted approval rates exceeding 75% against a national average closer to 60-65%. For developers and lenders comparing sites, REalyse comparables and planning-status data increasingly point to these commuter-belt and regional growth markets as where reform-driven applications are most likely to translate into deliverable schemes, rather than the capital.

Outlook: reform has changed intent, not yet output

The evidence supports a nuanced conclusion rather than a binary one. Planning reform has clearly changed developer behaviour: grey belt release has genuinely unlocked applications that would not have existed under the previous framework, and the shift toward larger, more strategic schemes suggests confidence is returning to parts of the market. That is a real and measurable effect of policy.

But the constraints holding back delivery were never primarily about planning consent alone. Construction cost inflation — with key materials still roughly 50% above levels of five years ago — labour shortages, Building Safety Levy costs of up to £14,000 per home, grid connection delays and softer buyer demand are all independent brakes on completions that no amount of consenting speed can remove. The Office for Budget Responsibility's own central case, even after crediting the reforms, still implies England falls meaningfully short of the 1.5 million target.

For institutional investors, developers and lenders, the practical takeaway is to treat the applications surge as a leading indicator of intent, not of near-term supply. The sharper analytical task now is separating genuinely viable, well-located pipeline — where local plans are adopted, infrastructure exists and approval rates are strong — from speculative or outline-stage applications that may sit dormant for years. Over the next 12–18 months, tracking scheme-level progression from application through to commencement, rather than headline submission counts, will be the difference between spotting real opportunity and mistaking paper demand for a housebuilding boom.