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 335,387 new homes were lodged in England during 2025 — the strongest year since 2020 — with submissions accelerating as the year went on: H2 outstripped H1 by nearly 72,000 units, a rise of roughly 51%. Momentum carried into 2026, with the year to June bringing applications for more than 412,000 new homes, the first 12-month period to clear 400,000 since 2022.

On paper, this is precisely what recent reform was designed to achieve. Mandatory local housing targets, the release of grey belt land, and a revised National Planning Policy Framework have visibly changed developer behaviour. The average number of homes per application has nearly doubled, from around 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 scattering of small infill schemes.

But a multi-year high in applications is not the same as a multi-year high in homes being built. Official figures tell a starkly different story further down the pipeline, and that divergence is where the real story of this reform cycle sits.

Approvals and completions tell the opposite story

Grants of planning permission have not kept pace with the surge in submissions. MHCLG data shows just 7,000 residential planning applications were granted in Q2 2025 — the lowest quarterly total since comparable records began in 1979. Across the 12 months to June 2025, 29,000 residential applications were granted in total, down 9% year-on-year, with approved dwelling numbers falling to 221,000, their lowest level since 2014.

The unit-count math is unforgiving. Hitting the government's target of 300,000 net additional homes a year implies an annual approvals rate of roughly 380,000 dwellings — current levels are running around 160,000 short of that. Six of nine English regions granted consent for fewer homes in the year to Q1 2026 than they actually completed in the same period, a signal that the forward pipeline is contracting even as applications climb.

Completions have followed suit. Housing completions in England totalled 143,110 in 2025-26, down from 152,040 the year before and the lowest level since 2015-16. Net additional dwellings — which also capture conversions and change of use — fell to 208,600 in 2024-25, a 6% decline. Speed has deteriorated alongside volume: only 20% of major planning applications were decided within the statutory 13-week period in Q4 2025, even though councils granted 87% of the decisions they did make. Local authorities are approving a high share of what reaches a decision — they are simply taking much longer to decide, and deciding on far fewer applications overall.

Why the conversion rate is the number to watch

For institutional investors and lenders underwriting UK residential exposure, the headline application figures are the least useful part of this story. REalyse data shows that for every 10 homes granted planning permission in England, only around 6 are typically built out within a five-year window — and that ratio has been narrowing since 2017 as larger, more complex sites make up a growing share of the pipeline. Multi-phase infrastructure, Section 106 obligations and viability renegotiation all add friction that smaller schemes rarely face, meaning a pipeline that looks stable in unit terms can still deliver more slowly in practice.

Comparing REalyse's planning-status data against new-build sales transactions — a useful proxy for homes actually reaching completion and buyers — shows just how uneven this conversion has become regionally. Across the last three years, the ratio of new-build transactions to units granted planning permission has averaged around 16% nationally, but the regional spread is wide enough to reshape where capital should be underwritten:

• South East and South West England carry two of the largest approved pipelines in the country (roughly 187,000 and 116,000 units respectively) but convert at only 13–14%, reflecting viability pressure, infrastructure phasing and prolonged Section 106 negotiation in high-value, high-constraint markets.

• East Midlands, North West and North East England show the strongest conversion ratios, in the 23–32% range, pointing to markets where consented sites are moving through to market faster — likely a function of smaller average scheme sizes and lower land and build-cost pressure.

• Scotland converts only a small fraction of its roughly 86,000 granted units into recorded new-build sales, the weakest ratio of any UK nation with meaningful transaction volume.

• Cambridgeshire and Oxfordshire stand out on the approvals side, posting approval rates above 75% against a national average closer to 60–65%, making these commuter-belt growth corridors — alongside Kent, Greater Manchester, Essex and Hertfordshire — some of the more credible bets for reform-driven applications actually translating into delivered stock.

London sits apart from the rest of England entirely. While every other region recorded rising applications through 2025 and into 2026, London applications fell back towards 2023 levels, and private housing starts in the capital more than halved in H1 2025. That pattern is being driven by Building Safety Act requirements, high affordable housing quotas and weak sales absorption — not by a lack of planning appetite.

Outlook: intent is not delivery

England's planning system is undeniably busier than it has been in years, and rising applications are a necessary precondition for higher housebuilding. But 2025-26 has made clear that a surge in intent does not automatically produce a surge in output — approvals, decision speed and completions have all moved in the opposite direction to submissions over the same period.

For developers, the practical takeaway is to treat application volume as a leading indicator, not a delivery forecast, and to weight site selection towards local authorities and regions with demonstrated conversion track records. For lenders and investors, the widening gap between consented pipeline and completed stock reinforces the case for underwriting against realistic build-out timelines rather than headline unit counts, particularly on large strategic and grey belt sites still working through committee. REalyse will continue tracking approval rates, conversion ratios and regional delivery data as 2026 progresses — this is the gap that will determine whether current reform genuinely shifts UK housing supply, or simply shifts where the bottleneck sits.