BLOGS

A pipeline that looks healthier than it is

England's planning system processed more housing ambition in 2025 than at any point since 2021. Planning Portal data shows applications for 335,000 new homes were lodged outside London last year, a 60% jump on 2024, with the final quarter alone up 61% year-on-year. Momentum has carried into 2026: the year to June recorded permission sought for over 412,000 new homes, the strongest opening half of any year this decade, according to TerraQuest's Planning Application Index.

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 and grey belt land release have visibly shifted developer behaviour, and every English region outside London recorded growth in applications through the year.

But a four-year high in submissions is not the same as a four-year high in homes being built. For anyone underwriting UK residential exposure, the gap between what developers are asking for and what is actually getting consented and constructed is where the real story sits.

Approvals and completions tell a different story

Look past the submissions headline and the numbers turn considerably more sober. Fewer than 29,000 residential planning applications were granted across England in the year to June 2025, and just 7,000 were approved between April and June - the lowest quarterly figure since comparable records began in 1979. Granted residential units followed the same trajectory, falling from roughly 237,000 in the year to June 2024 to around 221,000 a year later, with some readings of full-year 2025 data putting granted units closer to 202,000-210,000.

Completions have moved in the same direction. Housing completions in England fell to around 143,000 in 2025-26, the weakest total since 2015-16, while net additional dwellings dropped to roughly 208,600 in 2024/25, a 6% annual decline and well short of the c.300,000 run-rate implied by the government's 1.5 million homes target. Perhaps most tellingly, six of England's nine regions granted consent for fewer homes in the year to Q1 2026 than they actually completed - a signal that the pipeline feeding future supply is, in places, contracting even as application volumes climb.

This is not a story about planning committees becoming more cautious. Approval rates for applications that do reach a decision have held up reasonably well, running in the high-70s to low-80s by unit volume, only a few points below 2020-21 highs. What has collapsed is the volume of large schemes reaching determination at all - refusals have fallen alongside approvals, suggesting fewer ambitious schemes are being brought forward for a decision in the first place, rather than more being turned down.

Why the backlog keeps building

Several structural constraints explain why rising intent isn't converting into rising delivery. Determination times for major applications now regularly stretch past 300 days in some authorities, and only around 20% of major applications are decided within the statutory 13-week window - the rest rely on extensions of time or planning performance agreements. Local plan coverage remains the binding constraint on land supply: only a minority of England's 309 local planning authorities carry an adopted plan less than five years old, and grey belt release only functions where councils have identified and allocated the relevant land.

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 was meant to deliver. For institutional lenders and developers, this lag is the critical underwriting variable: a scheme granted permission today may not break ground for 18-24 months, and viability conditions - build costs, sales absorption, Building Safety Levy costs landing from October 2026 - can shift materially in that window.

Even where consent is secured, build-out rates on the largest sites remain a separate bottleneck. Government analysis of large sites (2,000-plus homes) has found a median build-out rate of around 140 homes per year, implying well over a decade from first build to site completion - a function of developers pacing delivery to local sales absorption rather than physical construction capacity.

Regional divergence matters more than the national headline

The national numbers also mask a sharp geographic split that should shape where capital gets allocated. London saw applications fall by almost a third in 2025, back to levels last seen in 2023, with private housing starts in the capital more than halving in H1 2025 - a pattern driven by Building Safety Act requirements, high affordable housing quotas and weak sales absorption rather than a lack of planning appetite.

By contrast, growth corridors such as Kent, Greater Manchester, Essex, Hertfordshire and parts of the South East are showing both the deepest application pipelines by unit count and comparatively stronger approval rates - some authorities in the Cambridgeshire and Oxfordshire arc are approving over 75% of applications against a national average closer to 60-65%. REalyse comparables and planning-status data increasingly point to these commuter-belt markets as where reform-driven applications are most likely to translate into deliverable schemes, while consented land in slower-approval authorities is starting to command a visible premium over unconsented sites - reflecting the option value of a live permission in a tighter environment.

Outlook: watch granted units, not application volumes

For developers, lenders and investors, the headline "four-year high" in applications is encouraging as a leading indicator of confidence, but it is the wrong number to underwrite against. Granted units, determination speed by local authority, and the gap between consents and completions in each region are the metrics that will actually determine whether 2026-27 delivers more homes or simply a longer queue.

Progress over the next twelve months will show up as annualised starts sustainably above 150,000, rising residential grants rather than rising submissions, and narrowing determination times for major schemes. Until those move together, the safest assumption for anyone pricing UK residential development risk is that the pipeline is getting fuller before it gets faster.