BLOGS

The gap between ambition and delivery

England's planning system is facing a familiar but sharpening tension. Official planning statistics point to residential applications climbing back towards their highest level in around four years, driven by developers testing the market ahead of anticipated reforms to the National Planning Policy Framework and local plan cycles. On paper, that looks like renewed confidence in the pipeline.

The reality on the ground tells a more cautious story. REalyse's planning data across England shows that while application volumes have fluctuated, the proportion of applications actually granted has been drifting lower year on year, and a rising share of schemes are sitting unresolved in local authority queues rather than moving through to decision. For developers, lenders and investors underwriting sites today, the widening distance between applications submitted and permissions granted is now the more decisive data point than the headline application count itself.

What the approval data shows

Looking at residential planning decisions tracked across England's local planning authorities over the past five years, the pattern is consistent: approval rates have eased from around three-quarters of decided applications in 2021 to closer to seven in ten in the most recent full years of data. That is not a collapse, but it is a meaningful and sustained tightening, and it comes at a time when the sector needs the opposite direction of travel to hit national housebuilding targets.

Two things stand out in the REalyse dataset:

• Refusal rates have crept up. The share of decided applications ending in refusal has grown steadily since 2021, even as total application volumes have moved around. This suggests authorities are applying stricter scrutiny per scheme, not simply processing a smaller pool.

• The "in progress" pipeline has swollen. The stock of residential applications still awaiting a decision has grown noticeably in the most recent submission year tracked, well above the levels seen in 2021-2023. Some of this reflects normal processing lag for recently submitted schemes, but it also points to slower throughput at committee and officer-delegation level, extending the average time between submission and permission.

For institutional investors and lenders, this backlog matters as much as the approval rate itself. A scheme sitting "in progress" for longer ties up capital, delays GDV realisation, and increases exposure to cost inflation between appraisal and start on site. REalyse's development pipeline data lets analysts track exactly where a given authority's undecided stock sits relative to its historic norm, which is increasingly a better predictor of delivery risk than the headline decision itself.

Regional divergence is the real underwriting risk

National averages mask what is, in practice, a highly uneven picture across England. REalyse's local-authority-level planning data shows approval rates varying widely, with some authorities consistently granting the large majority of residential schemes they receive, while others sit well below 50% on a rolling basis. That spread has widened rather than narrowed over the past few years.

This divergence has direct implications for site selection and risk pricing. Two adjoining boroughs can carry materially different planning risk premiums purely because of how their planning committees and local plans have evolved, independent of underlying housing demand or achievable sales values. For development managers preparing investment committee materials, cross-referencing a target local authority's historic approval rate and average decision timeline against comparable sales and rental evidence - rather than relying on national planning statistics alone - is becoming a standard part of underwriting, not a nice-to-have.

Lenders assessing development finance exposure face a parallel issue: a borrower's site may look sound on comparables and GDV, but if it sits in a local authority with a below-average approval rate and an above-average backlog, the realistic delivery timeline - and therefore the loan's risk profile - looks different from what national headlines would suggest.

Where this leaves developers and investors

The subplot beneath the headline "applications up, approvals down" story is one of growing dispersion in delivery certainty across England. Aggregate housebuilding ambition, measured by applications submitted, is trying to recover. But the conversion of that ambition into permissioned, deliverable units is happening more slowly and less predictably than it was even three or four years ago.

For developers, that argues for weighting site selection more heavily towards authorities with a demonstrated track record of timely, favourable decisions, even where land values are marginally higher, since planning risk is itself a cost. For investors and lenders, it reinforces the case for building planning-stage due diligence - approval rates, refusal trends, and average time-to-decision at the local authority level - into every appraisal alongside the usual sales and rental comparables.

The next few quarters of decision data will show whether the current backlog clears as authorities catch up, or whether the gap between submissions and grants continues to widen. Either way, the story is no longer just about how many applications are coming in - it is about how many, and how quickly, are converting into homes that can actually be built.