BLOGS

A pipeline swelling in scale, if not in speed

Something unusual happened in the UK planning system in 2025. Developers and applicants proposed more homes through the planning process than in any of the previous four years, according to REalyse planning application data, with just over 761,000 residential units submitted across England, Scotland, Wales and Northern Ireland during the year. That is up sharply from roughly 494,000 in 2024 and comfortably above the 660,000 proposed back in 2021.

Yet consents have not moved in step. Local authorities granted permission for around 403,000 units in 2025 — essentially flat versus 2024's 442,800, and below the 500,000-plus granted in 2021. The result is a units gap (proposed minus granted) of roughly 358,000 in 2025 alone, more than double the previous five-year high recorded in 2021 and over eight times the 2024 gap. For an industry watching supply pipelines closely, that divergence is the headline story.

Interestingly, the picture looks different if you count applications rather than units. The number of individual planning cases submitted has actually trended down since 2021 — from around 36,000 applications that year to roughly 23,000 in both 2024 and 2025. What's changed is the average size of what's being proposed: fewer, larger schemes are driving the unit count higher, even as case volumes cool. That's consistent with reform efforts nudging activity toward bigger, more strategic sites rather than a broad-based uptick in small-scale applications.

Is planning reform building confidence without building homes?

The UK Government's planning reform agenda — including changes to the National Planning Policy Framework, mandatory local housing targets, and moves to speed up major applications — has been explicitly designed to unblock supply. The 2025 surge in proposed units is consistent with that reform narrative: developers appear more willing to bring forward ambitious, large-unit schemes, betting that a more permissive policy environment will eventually convert into consents.

But confidence at the application stage is not the same as delivery. The national approval rate — grants as a share of submissions — actually dipped to around 66% in 2025, down from 71.8% in 2024, even as the volume of homes proposed nearly doubled. That combination — more homes proposed, a lower share approved — is the clearest sign yet that planning departments are struggling to process the increased scale and complexity of what's landing on their desks, whether due to resourcing constraints, more contested major schemes, or slower committee timelines for larger sites.

For lenders and investors underwriting development finance, this matters. A pipeline that looks strong at the "units proposed" stage can be materially weaker once translated into "units with implementable consent" — the metric that actually feeds GDV assumptions, drawdown schedules and exit timing.

Where the gap is widest

REalyse's regional planning data for 2025 shows the applications-to-approvals gap is far from uniform:

• London submitted the highest number of applications of any UK nation or region (around 3,600) but posted one of the lowest approval rates, at roughly 59%, alongside a units gap of over 77,000 — the second-widest of any region.

• South East England had the largest absolute units gap nationally, at roughly 74,000, despite a healthier approval rate near 67%, reflecting the sheer scale of units tied up in a smaller number of large, complex schemes.

• West Midlands recorded the lowest approval rate in the UK at 59%, suggesting a particularly acute bottleneck in one of the country's key regeneration and housing delivery markets.

• Scotland (84%) and Northern Ireland (96.3%) stood out with far higher approval rates, converting a much greater share of submitted schemes into consented units — a pattern worth watching for investors comparing risk-adjusted delivery timelines across UK nations.

For developers site-sourcing across regions, this reinforces a familiar lesson: planning risk is highly local, and headline "reform" narratives at a UK level can mask sharply different realities on the ground borough by borough.

What this means for developers, lenders and investors

For development managers, the practical implication is that pipeline confidence should not be read as delivery certainty. A scheme sitting at application stage in London or the West Midlands currently carries materially higher consent risk than an equivalent scheme in Scotland or Northern Ireland — a distinction that should feed directly into risk-adjusted underwriting and construction-start assumptions.

For lenders, the widening national gap is a signal to stress-test development finance facilities against longer-than-expected time-to-consent, particularly for larger, unit-dense schemes of the type driving the 2025 surge. Comparing a target site's local authority against REalyse's local approval-rate and time-on-decision benchmarks can help sense-check whether a borrower's planning timeline assumptions are realistic.

For investors evaluating exposure to the housebuilding sector, the data suggests the "recovery" story is currently a proposal-stage phenomenon rather than a delivery-stage one. Units under construction and completions data will be the real test of whether 2025's surge in ambition survives contact with the planning system.

Outlook

If 2026's early figures — already showing a 72.3% approval rate on units submitted so far — are any indication, some of the backlog built up in 2025 may start clearing. But with a units gap that ballooned to five-year highs last year, it will likely take several quarters of sustained approvals to work through the pipeline. Until then, the honest reading of the data is that planning reform has, so far, done more to boost applicant confidence than to accelerate consented supply — and the regions where that gap is narrowest may prove the more reliable hunting ground for near-term delivery.