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 335,387 new homes were lodged across England in 2025 — the strongest year since 2020 — with the final quarter alone accounting for 109,000 homes outside London, up 61% year-on-year. Momentum has carried into 2026: in the year to June, permission was sought for over 412,000 new homes, the first 12-month period to clear 400,000 since 2022, with every region outside London recording growth.

On paper, this is exactly what the Planning and Infrastructure Act and the revised National Planning Policy Framework were designed to achieve. Mandatory local housing targets, the release of "grey belt" land, and streamlined 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 scattering of small infill schemes.

But a five-year high in applications is not the same as a five-year high in homes being built. ONS figures show housing starts totalled just 150,000 across 2025, while completions in England fell to 143,110 in 2025-26 — down from 152,040 the year before and the lowest level since 2015-16. TerraQuest, which operates Planning Portal, has been blunt about the disconnect: "the gap between developer intent and on-the-ground delivery is continuing to grow," warning of a "missing city" of homes applied for but never built. That gap is where the real story of this reform cycle sits, and it matters intensely to anyone underwriting UK residential exposure today.

Where the pipeline is leaking

The attrition happens in stages, and each one loses volume. Submissions convert to decisions, decisions convert to starts, and starts convert to completions — but government figures show just 20% of major planning applications in England were decided within the statutory 13-week period in the final quarter of 2025, even as councils granted 87% of the decisions they did make. Six of nine English regions granted consent for fewer homes in the year to Q1 2026 than they actually completed, a signal that the pipeline feeding next year's delivery is, in places, contracting rather than growing.

REalyse's planning pipeline data tells a consistent story across cycles: application growth does not translate one-for-one into granted consents, and granted consents do not translate one-for-one into started sites. Local planning authority capacity has been under sustained pressure for over a decade, and biodiversity net gain requirements, nutrient neutrality restrictions and stricter build-safety sign-off have added new pre-consent hurdles, particularly across the South East, East Anglia and parts of the North West. Viability compounds the effect — with build costs still elevated relative to pre-2022 levels, REalyse comparables across local authority areas show consented land increasingly commanding a premium over unconsented sites, reflecting the option value of a live permission in a slower-approval environment.

For developers and lenders, the practical implication is that planning risk deserves the same underwriting scrutiny as market risk. A scheme with an "in progress" application in a resource-constrained authority carries a materially different timeline than a comparable scheme in a well-resourced district with an adopted local plan.

Regional divergence: growth corridors versus a struggling capital

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 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, 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%. 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.

Notably, affordable housing applications also reached a five-year quarterly peak in Q4 2025, with 2025 recording the highest annual total for affordable housing submissions in the last five years. That is a genuinely encouraging signal for registered providers and build-to-rent operators targeting mixed-tenure schemes, though the same starts-versus-completions gap applies here too.

Outlook: watch conversion, not submissions

The Office for Budget Responsibility has raised its five-year housebuilding forecast on the back of planning reform, but still expects net additions to dip in the near term — from an average of around 260,000 homes a year in the early 2020s to roughly 220,000 in 2026-27 — before recovering. Even its more optimistic scenarios leave England well short of the 300,000-a-year run-rate implied by the government's 1.5 million homes target.

For institutional investors, developers and lenders, the 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.