BLOGS

A planning system waking up outside the capital

England's planning system is producing one of its most striking signals in years. According to Planning Portal data, applications for 335,000 new homes were lodged outside London in 2025 — a 60% increase on 2024. In the final quarter alone, 109,000 homes were applied for, up 61% on the same period the year before. Every region outside London recorded growth; London itself saw applications fall by almost a third, returning to levels last seen in 2023.

The driver is unmistakable. Labour's December 2024 revision to the National Planning Policy Framework introduced "grey belt" — a new classification for Green Belt land that is either previously developed or makes limited contribution to the purposes Green Belt is meant to serve. The Planning and Infrastructure Act, which received Royal Assent on 18 December 2025, has since written these reforms into statute, backed by £48 million to recruit roughly 1,400 new planning officers and a streamlined environmental assessment process.

For institutional investors, developers and lenders, this is more than a policy footnote. It marks a structural shift in where land can be promoted, what it might be worth once consented, and how quickly capital can move from site acquisition to delivery.

What grey belt has actually unlocked

The mechanics matter. Grey belt sites benefit from a presumption in favour of development, provided schemes meet the "golden rules" — typically a minimum 50% affordable housing requirement, infrastructure contributions and green space provision. In principle, this targets disused car parks, degraded scrub and low-grade land at the fringes of settlements, not productive countryside.

In practice, the definition has proved considerably more elastic than ministers first suggested. Research from the London Green Belt Council and CPRE Hertfordshire found that 89% of Green Belt applications in Hertfordshire over the past year were classified by developers as grey belt. Separately, planning firm Marrons reported that 57% of Green Belt appeals succeeded in 2025 under the new framework, compared with 25% in 2024 — and government figures cited in Parliament put the approval rate for major residential grey belt appeals at around 80% since the reforms took effect.

Early consents illustrate the shift: a 550-home scheme in St Albans, 250 homes near Basildon, and 135 homes in Bagshot, Surrey — sites that would very likely have been refused under the previous rules. By March 2025, over 100 appeal decisions nationally had already cited the grey belt concept, a rapid uptake for a policy barely three months old at that point.

Where the growth is concentrated

The surge is not evenly spread. REalyse planning data points to particular strength in growth corridors with strong transport links — precisely the locations prioritised under the new station-adjacent densification rules in the December 2025 NPPF consultation. The South East, the Oxford–Cambridge Arc, and parts of the East of England and Midlands stand out as the most active battlegrounds, reflecting where Green Belt boundaries, acute affordability pressure and outdated local plans intersect.

Central London still leads by absolute unit count in the wider pipeline given its density potential, but Kent, Greater Manchester, Essex and Hertfordshire all show substantial pipeline depth, with proposed unit totals in the tens of thousands per region. Scotland, which sits outside the NPPF entirely, offers a useful control: several Scottish regions show application counts ticking up only modestly, with proposed unit volumes actually falling — suggesting the scale of the English surge is genuinely reform-driven rather than purely cyclical recovery.

Applications up, approvals down: the delivery gap

The headline growth in submissions sits alongside a far less encouraging picture further down the pipeline. Official figures show residential planning decisions fell 13% year-on-year in the 12 months to September 2025, to around 37,700 decisions — of which only 28,500 were approvals, itself an 8% decline. Some measures put full-year 2025 approvals at their lowest annual total in over two decades, with quarterly approval numbers touching levels not seen since comparable records began in 1979.

This divergence matters for underwriting. Outline permissions, which make up a large share of the current surge, convert to full applications and completed homes at a materially lower rate than direct full applications. Dwelling starts did rise 23% in Q4 2025 versus Q3 — the strongest quarterly increase since the post-pandemic recovery — but the Local Government Association has been clear that planning reform alone will not close the gap to Labour's 1.5 million homes target, citing shortages of construction workers and rising build costs as persistent constraints.

For lenders and investors, the practical implication is to treat rising application volumes as a screening signal rather than a proxy for near-term completions. Cross-referencing application growth against a local authority's five-year land supply position, local plan status and golden rules viability — including the 50% affordable housing requirement's effect on residual land value — remains essential before capital commits. REalyse comparables data for grey belt-adjacent commuter locations already shows achieved new-build sale values of £450–£600 per square foot or more in higher-pressure South East markets, underlining the uplift once planning certainty is secured on previously unbuildable land.

Outlook: opportunity is real, but selective due diligence wins

Grey belt reform has genuinely changed the calculus for land promotion in constrained markets. Sites that were non-starters eighteen months ago are now in active promotion, and the 60%+ surge in applications outside London is a real, measurable market response to policy — not just sentiment. But planning permission is not delivery, and the widening gap between submissions and approvals shows the system is still absorbing the shock of reform faster than it can process it.

For developers, investors, agents and lenders working this landscape, the message is consistent: use granular local authority, grey belt and scheme-status data to separate genuinely deliverable pipeline from applications that may stall. Understanding where local plans are up to date, where five-year land supply is thin, and where comparable grey belt schemes have actually converted to consent will separate the winners from the stranded as this cycle plays out.