BLOGS

A faster planning system, but not necessarily a bigger one

The headline numbers doing the rounds this year are encouraging on the surface: England's housebuilding sector is being told planning applications are running at a five-year high, and that the government's reform agenda — from the revised National Planning Policy Framework to mandatory local housing targets — is starting to unstick the system. For developers, lenders and investors who have spent years underwriting deals against planning delay as a core risk factor, that would be a meaningful shift.

REalyse's planning pipeline data, tracking residential applications submitted across England over the past five years, shows something more nuanced. Average time from submission to decision has fallen dramatically — from around 205 days for applications submitted in 2021 to roughly 64 days for those submitted in 2025. That is a genuine and significant improvement in the mechanics of the system. But the approval rate for decided applications has not moved in the same direction: it sat at 74.6% in 2021, dipped to around 70% by 2023, and has held at roughly that level through 2025. Total residential units attached to granted applications, meanwhile, has fallen from close to 345,000 in 2021 to around 165,000 in the most recent full year tracked — a reminder that a faster process is not the same as a bigger one, and that scheme sizes and submission mix have shifted alongside speed.

For institutional investors and developers, this distinction matters for underwriting. Faster decisions reduce holding costs and de-risk site acquisition timelines, which is a genuine tailwind for development appraisals and land-buying strategy. But a flat approval rate and a shrinking pool of granted units suggest the reforms are improving throughput of what gets submitted, not necessarily widening the funnel of what gets built.

Where the bottlenecks still bite: London and the approval rate ceiling

REalyse's regional breakdown of planning activity over the last five years points to London as the clearest constraint in the system. Application volumes in the capital remain among the highest of any English region, but London's approval rate — at roughly 60% of decided applications — is the lowest in the country, well below the South West and South East, where approval rates run closer to 75-83%. Average decision times in London have also compressed, down to around 141 days, but that speed is arguably masking the real issue: a higher proportion of schemes are being refused outright rather than delayed.

This matters directly for site selection and land appraisal. A scheme in a South West or South East local authority is, on current pipeline data, meaningfully more likely to secure consent than an equivalent scheme in London — even before accounting for viability, density and affordable housing policy differences that tend to be sharper in the capital. For lenders assessing development finance risk, planning geography is increasingly as important as asset type: REalyse comparables show approval-rate dispersion of over 20 percentage points between the best- and worst-performing English regions, a spread wide enough to materially change the risk profile of a facility before a single spade is in the ground.

The stage-by-stage pipeline data adds another layer. Even where consent is granted, the proportion of units sitting in "Granted" or "In Progress" stages relative to those reaching "In Construction" remains heavily skewed toward the earlier stages across every region, including the higher-approval South West and South East. In other words, the conversion problem is not confined to planning committees — it persists through the build-out phase, where site mobilisation, contractor capacity and financing conditions determine whether a permission becomes a start on site.

What this means for developers, lenders and agents

For development managers, the practical read is that faster decisions should be factored into land-buying and cashflow models, particularly outside London, where approval odds are also more favourable. Sites in the South West, South East and East of England currently combine above-average approval rates with materially shorter decision windows than they did three years ago — a combination worth stress-testing against acquisition appraisals that were built on older, slower assumptions.

For credit and risk teams at lenders, the regional approval-rate gap is a variable worth pricing explicitly rather than treating planning risk as a single national assumption. A facility secured against a London scheme sits in a different risk bracket to an equivalent scheme in the South West purely on the basis of historical approval-rate dispersion, independent of underlying site quality.

For agents and valuers, the shrinking pool of granted units — even as decisions speed up — is a useful market-timing signal. Areas where planning throughput is compressing faster than approval volumes are likely to see tighter forward supply of new-build stock, with knock-on effects for new-build pricing, absorption rates and comparables in 12-24 months' time.

Outlook

The data supports a partial validation of the "planning reform is working" narrative: England's system is unquestionably deciding applications faster than it was five years ago, and that is a real, measurable win for reform advocates. But speed alone doesn't solve the housing delivery challenge if approval rates plateau and the unit volume moving through the pipeline continues to shrink. The next test for Labour's planning agenda is whether faster processing eventually widens the approval funnel — particularly in London, where the gap between application volume and consent rate remains the starkest bottleneck in English housebuilding. Until that shifts, institutional players are likely to keep favouring regions where the planning system is not just quicker, but more permissive.