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 multi-year high in applications is not the same as a multi-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, approvals and starts still lagging

The delivery-side numbers tell a more sober story than the submissions headline suggests. REalyse's analysis of the national planning pipeline shows proposed residential units in England rose from around 339,000 in 2021 to over 415,000 in 2025 — growth of roughly 23%. Over the same period, units actually granted consent fell from approximately 252,000 to around 123,000, an implied approval rate collapse from roughly 74% to under 30%.

That is not a system approving more homes faster. It is a system processing a larger backlog with a shrinking success rate. Separately, Home Builders Federation data (based on Glenigan figures) shows the rolling annual number of approved projects hit a fresh record low for twelve consecutive quarters, with the year to Q3 2025 delivering permission for roughly 210,000 homes — down nearly 40% from the 2022 peak.

Housing starts and completions have followed the same trajectory. ONS and BCIS data recorded around 150,000 housing starts across the UK in 2025 — up 12% on 2024, but still 21% below pre-pandemic 2019 levels. 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 government's 1.5 million homes target. 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 — build costs, interest rates, Section 106 obligations — can shift materially in that window.

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, 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.

Outside England, the devolved picture looks different again. Scottish housing starts averaged just over 16,000 a year between 2023 and 2025, well below the preceding decade's average of nearly 20,000, while major housing applications (50+ homes) determined have fallen sharply from a 2019/20 peak. Wales has seen approved units fall from around 5,200 in 2022 to below 2,100 in 2025. Since planning is devolved, England's application surge and reform agenda have no direct read-across to Scotland, Wales or Northern Ireland — a distinction worth flagging for any UK-wide portfolio strategy.

What this means for viability and underwriting

The bottleneck sits in conversion rates, committee capacity, Building Safety Regulator throughput for higher-risk buildings, and site viability — not in a shortage of applications. REalyse's planning dataset shows average decision times on major residential schemes running at around 249 days nationally, with wide regional variation: some local authorities take over 340 days to determine major applications, while others clear equivalent schemes in under 220 days.

New cost pressures are stacking on top of an already stretched viability picture. A Building Safety Levy launching in October 2026 is expected to add several thousand pounds per new home, and Landfill Tax is set to double from April 2026. Zoopla research has previously found that around half the country's sites are currently unviable at prevailing costs and end values — a constraint that no amount of planning reform can fix on its own.

For agents and valuers, this means asking-price and GDV assumptions built on optimistic delivery timelines need stress-testing against realistic start dates, not consent dates. For lenders, it means treating a planning permission as a necessary but not sufficient signal of deliverability — REalyse comparables, days-on-market data and local absorption rates remain essential checks before drawdown.

Outlook

England's planning system is undeniably busier than it has been in years, and that activity is a necessary precondition for higher housebuilding. But the surge is currently better described as a surge in applications than a surge in delivery. Until approval rates stabilise and completions data works through the reporting lag to show a genuine recovery, the gap between planning activity and housebuilding outcomes is likely to remain the more important number for developers, lenders and investors to watch — one REalyse will continue tracking as 2026 data matures.