BLOGS

A record pipeline, but not the one ministers wanted

Residential planning applications across England reached their highest level in at least six years during 2025, with proposed schemes totalling over 415,000 homes, according to REalyse's analysis of the national planning pipeline. On the surface, that looks like exactly what government reform efforts have been chasing: a housebuilding system generating more supply-side activity than at any point since the post-pandemic recovery of 2021.

The headline number supports the political narrative. Planning reform, faster local plan adoption and pressure on councils to hit housing targets appear to be pushing more schemes through the front door of the system. For developers and investors who have spent years complaining about planning as the binding constraint on delivery, a rising tide of applications should be good news.

But REalyse's pipeline data tells a more complicated story once you follow those applications past submission. Approvals, starts and completions are not moving in the same direction as applications - and in one critical respect, they are moving the opposite way.

Applications up, approvals down: the widening gap

The most striking divergence in the REalyse dataset is between applications submitted and units actually granted consent. In 2021, England approved roughly 252,000 residential units, against 339,000 proposed - an approval rate of around 74%. By 2025, proposed units had risen to over 415,000, yet approved units fell to around 123,000, an implied approval rate of under 30%.

In other words, the volume of applications hitting planning departments has grown by roughly 23% since 2021, while the volume of units actually being granted consent has fallen by more than half over the same period. This is not a system approving more homes faster - it is a system processing a larger backlog with a shrinking success rate.

For institutional investors and lenders underwriting development finance, this matters more than the applications headline. A pipeline of unconsented schemes carries materially different risk than a pipeline of granted permissions. Sites without consent cannot support a viable drawdown schedule, cannot be marketed with confidence to forward funders, and cannot be relied upon in GDV assumptions for at least another planning cycle.

Why approval rates might be falling

Several structural factors plausibly explain the gap, though REalyse's data cannot isolate causation directly:

• Higher-risk, marginal sites entering the system - as land becomes scarcer in established growth corridors, more applications may be coming from sites with weaker planning fundamentals (flood risk, heritage constraints, infrastructure gaps), which are more likely to be refused or withdrawn.

• Local authority capacity constraints - many planning departments remain under-resourced relative to caseload growth, which can manifest as more refusals or non-determinations rather than faster consents.

• Policy transition friction - reforms to the National Planning Policy Framework and local plan requirements can temporarily depress approval rates as authorities and applicants adjust to new tests, even where the medium-term intent is to accelerate delivery.

Any of these would be consistent with a rising applications count coexisting with a falling grant rate - and all three point toward a system in transition rather than one clearly unlocked.

Starts and completions: the data lag problem

Construction starts, tracked through project status and contract stage data, appear to have held up relatively well through 2024 and into 2025, with reported unit starts actually spiking to their highest level in the dataset. On its face this suggests some of the approved pipeline from prior years is now breaking ground.

Completions are where the picture becomes genuinely difficult to read. Reported completed units fell sharply from over 88,000 in 2022 to just over 26,000 in 2024, and the 2025 completions figure in the dataset is negligible. Some of this reflects a real slowdown - completions typically lag approvals by 18-36 months, so today's weak completions rate is substantially explained by the thin approval years of 2022-2023 working their way through construction programmes.

But part of the apparent 2025 completions collapse is very likely a reporting-lag artefact rather than a true delivery collapse: completion status on live schemes is often updated with a delay relative to when units are physically finished, so the most recent quarters will understate true completions until records catch up. Developers, lenders and agents should treat the very latest completions figures as provisional and expect meaningful upward revision over coming quarters, rather than reading them as evidence of an acute delivery cliff.

What is harder to dismiss as a reporting artefact is the multi-year trend: completions in 2023 and 2024 were running at roughly a third of the 2021 peak, even before the most recent lag-affected quarters are considered. That is consistent with a system where the approvals slowdown of the past three years is now visibly constraining what actually gets finished and handed over.

What this means for developers, lenders and investors

For development managers, the practical takeaway is that a rising applications count in a target local authority is not, on its own, a signal of easier delivery conditions. REalyse's comparables and planning pipeline data can help distinguish between authorities where rising applications are converting into consents at historically normal rates, and those where the gap between proposed and approved units is widening - the latter being a signal of tightening local risk, not loosening.

For lenders and credit teams underwriting development finance, the approval-rate gap is a useful diagnostic for concentration risk. A loan book skewed toward local authorities with falling approval rates, or toward borrowers reliant on marginal sites entering the system for the first time, carries different risk than one concentrated in areas with stable or improving grant rates.

For investors comparing regions, the message is to look past the applications headline to the conversion metrics beneath it - approval rate, start rate against approvals, and completions against starts - before treating "planning surge" as synonymous with "delivery surge."

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 REalyse's data suggests 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 the sector to watch - and one we'll continue tracking as 2026 data matures.