BLOGS

A planning system pulling in two directions

England's housing pipeline is sending a genuinely confusing signal to developers, lenders and investors. Planning Portal data shows applications for 335,000 new homes were lodged outside London in 2025 - a 60% jump on 2024, with the final quarter up 61% year-on-year. Momentum has carried into 2026: the year to 30 June 2026 recorded permission sought for 412,130 new homes, the strongest opening half of any year this decade.

Yet BBC Verify's housing tracker and official MHCLG figures tell a very different story on the output side. Fewer than 29,000 residential projects were granted permission in the year to June 2025, and just 7,000 applications were approved between April and June - the lowest quarterly figure since comparable records began in 1979. Housing completions in England fell to roughly 142,000-143,000 in 2025-26, the weakest total since 2015-16. For a government that needs around 300,000 net additions a year to hit 1.5 million homes by 2029, the gap between developer intent and delivered supply has rarely looked wider.

For institutional players underwriting sites or stress-testing loan books, this divergence matters more than either headline number in isolation. A rising application count signals renewed confidence in land promotion and scheme viability. But if that intent cannot clear the approval and build-out stages, it simply adds to a growing stock of consented-but-unbuilt land - capital committed, returns deferred.

Why applications are up but approvals aren't following

The counterintuitive part of this story is that 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 in the first place. REalyse planning data shows granted residential units in England peaked at just under 459,000 across nearly 22,000 approvals in 2021, falling to around 202,000-210,000 granted units by 2025 - a decline of more than 55% in four years, even as decided application volumes have thinned to roughly 18,900-19,000.

This points to a pipeline problem rather than a committee-caution problem. Refusals have also fallen, from around 6,900-10,900 in 2020 to roughly 4,200-7,200 in 2025, suggesting fewer ambitious schemes are being brought forward for a decision at all. Under-resourced planning departments, determination times stretching past 300-340 days for major applications in some authorities, and a Building Safety Regulator process that has rejected a significant share of pre-construction applications for higher-risk buildings are all compounding the lag between submission and consent.

REalyse data shows over 677,000 residential units currently sitting in applications awaiting a decision across England, with a further 622,500 units holding a granted consent but yet to break ground. That is well over a million homes already in the system - a pipeline that looks healthy on paper but is taking materially longer to convert into anything a valuer, lender or comparables analysis would recognise as deliverable stock.

Are grey belt reforms moving the pipeline?

Labour's answer has been the Planning and Infrastructure Act 2025, which received Royal Assent in December 2025, alongside the December 2024 NPPF revision that reinstated mandatory local housing targets and created the "grey belt" - lower-quality Green Belt land such as disused car parks, scrubland and previously developed sites that can now be released for housing under a set of "golden rules" on affordable provision and infrastructure contributions.

The early evidence is mixed but not discouraging. Average scheme size has nearly doubled, from around 6.8 units per application in Q1 2024 to close to 12.9 by Q2 2026, suggesting developers are bringing forward larger, more strategic sites in response to the new policy signal - precisely the type of scheme grey belt release is designed to unlock. REalyse land parcel data confirms outer London boroughs and commuter-belt authorities across the South East and East of England hold disproportionately large tracts of low-grade Green Belt land adjacent to existing transport infrastructure, which is where reform-driven repricing is most likely to show up first.

But six of nine English regions granted consent for fewer homes in the year to Q1 2026 than they completed - a sign the pipeline is, if anything, contracting even as applications climb. Local plan coverage remains the binding constraint: 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 actually identified and allocated the land. Building Safety Levy costs from October 2026 and a doubling of Landfill Tax from April 2026 will add further pressure to scheme viability in exactly the areas where approvals are already scarce.

What this means for developers, lenders and investors

The application surge is a genuine signal of developer confidence returning post-election, and REalyse-style planning comparables can help identify where that confidence is best supported by local plan coverage and grey belt allocation - rather than simply chasing headline submission volumes. For site appraisal and GDV modelling, the practical takeaway is to weight consented-but-unbuilt pipeline and average determination times as heavily as raw application counts when assessing delivery risk in a given authority.

For lenders and institutional capital, the widening gap between applications and completions argues for continued selectivity - favouring authorities and site types where planning risk is lower and delivery timelines are better evidenced, rather than assuming rising submissions translate directly into near-term supply or rental/yield normalisation in constrained markets.

The direction of policy travel is coherent: mandatory targets, streamlined consenting and grey belt release all address genuine structural blockages. But the data confirms that approval and build-out capacity, not political intent, remain the binding constraint on the 1.5 million homes pledge. Whether 2025's application surge shows up in the metric that actually matters - completions - will be the real test of this Parliament's planning reforms.