BLOGS

A pipeline that looks healthier than it is

England's planning system is processing more housing ambition than it has in half a decade. Planning Portal data shows applications for 335,387 new homes were lodged in 2025, more than 120,000 units above 2024 levels and the strongest year for submissions since 2020. Momentum has carried into 2026: in the year to 30 June, permission was sought for 412,130 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 — a sign that larger, more strategic sites are coming forward rather than a wave of small infill schemes.

But a five-year high in applications is not the same as a five-year high in homes being built. For institutional investors, lenders and developers underwriting UK residential exposure, the gap between what is submitted and what is actually completed is where this reform cycle will be judged.

Why the conversion rate is the metric that matters

Historically, the vast majority of applications are approved, and roughly seven in ten approved schemes go on to convert into a completed home. That points to a long-run conversion rate somewhere in the low 60s (as a percentage). Reaching 300,000-plus annual completions on that basis would require a submission pipeline running well ahead of where England sits today.

Official figures underline just how wide the gap has become. Roughly 7,000 residential planning applications were granted in a recent quarter alone — the lowest quarterly figure since comparable records began in 1979 — and housing completions in England fell to around 142,000–143,000 in 2025/26, the weakest total since 2015/16. Against a government ambition of roughly 300,000–325,000 net additions a year to hit 1.5 million homes by 2029, this is a material shortfall.

Crucially, much of the current surge is concentrated in outline applications rather than full applications, and outline permissions have historically converted to completed homes at a materially lower rate. REalyse planning data shows approval rates on decided applications holding broadly stable, but a rising volume of undecided, large-unit schemes that could extend delivery timelines by 12–24 months or more — tying up developer capital without adding to near-term completions. Average decision times on major residential schemes are running at around 249 days nationally, but with wide regional variation: some local authorities are taking over 340 days to determine major applications, while others clear equivalent schemes in under 220 days.

Regional divergence: London's pullback 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, a pattern driven by Building Safety Act requirements, high affordable housing quotas and weak sales absorption rather than by planning appetite itself.

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. 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. For lenders assessing collateral risk and developers screening sites, this divergence is a strong argument for weighting due diligence toward local planning capacity and historical build-out rates, not just headline application volumes.

What this means for viability and yields

The submission surge is landing alongside fresh cost pressures rather than easing viability. A Building Safety Levy from October 2026 and a doubling of Landfill Tax from April 2026 will add further pressure to scheme economics in exactly the areas where approvals are already scarce. For investors modelling gross development value and rental yields on pipeline sites, this argues for conservative build-cost and timeline assumptions, particularly on outline consents in high-cost southern markets.

For buy-to-let and build-to-rent investors, a slower conversion rate from planning to completion also has a supply-side upside: constrained delivery in high-demand corridors tends to support rental growth and yield resilience, even where sale price growth is more muted. REalyse rental and yield data across regional growth markets is worth benchmarking against pipeline volumes when assessing where supply constraints are most likely to persist.

Outlook

Planning reform has delivered a genuine uplift in developer intent — the numbers are unambiguous on that point. What it has not yet delivered is a matching uplift in approvals or completions, and the structural constraints behind that gap — planning department capacity, Building Safety Regulator throughput, land assembly economics and viability in high-cost areas — are not things a faster online submission process can fix on its own.

For institutional players, the practical takeaway is to treat application volumes as an early-stage signal rather than a delivery forecast, and to weight decisions toward markets and local authorities with a track record of converting consent into completed, occupied homes.