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 around 335,000 new homes were lodged outside London during 2025 alone – the strongest annual total since 2020 – with submissions accelerating through the year and the final quarter up sharply on the same period in 2024. Momentum has carried into 2026, with permission sought for over 400,000 new homes in the year to June.

On paper, this is exactly what recent planning reform was designed to achieve. Mandatory local housing targets, a revised National Planning Policy Framework, the release of lower-quality Green Belt ("grey belt") land and pressure on councils to demonstrate a five-year land supply have visibly changed developer behaviour. Average scheme sizes have grown too, with several data providers pointing to larger, more strategic sites entering the system rather than a wave of small infill applications.

But a multi-year high in applications is not the same as a multi-year high in homes being built. Follow those applications past submission and the picture changes substantially – and for anyone underwriting UK residential exposure, that gap is where the real story sits.

Applications up, approvals and consents down

The most striking divergence sits between what is submitted and what is actually granted. Home Builders Federation figures (based on Glenigan data) show new planning consents falling by around 39% over three years, to roughly 180,000 homes in 2025 – the lowest 12-month total since 2013 and some 38% below the 2022 peak. MHCLG's own statistics tell a similar story: 63,000 applications were granted across England in the final quarter of 2025 alone, with all three headline indicators – applications received, decisions made and approvals granted – down year-on-year.

REalyse's own planning pipeline data is directionally consistent with this pattern. Looking at residential applications by submission year, our grant rate has drifted down from the low-to-mid 70s (as a percentage of decided applications) earlier in the decade to around the high 60s more recently, even as total residential units associated with granted schemes have fallen materially year over year. Six of nine English regions granted consent for fewer homes in the year to Q1 2026 than they actually completed – a sign the approved pipeline itself is contracting rather than simply slowing in its conversion to build-out.

Decision speed adds another layer of friction. Only around one in five major applications was decided within the statutory 13-week period in the final quarter of 2025, even though councils granted the large majority of the decisions they did reach. Extensions and planning performance agreements are keeping complex schemes moving, but they should not be mistaken for a system that is routinely faster.

Consents are not completions

Even where permission is granted, the path to a finished home is long and increasingly uncertain. The Local Government Association estimates that more than 1.4 million homes with planning permission in England remain unbuilt. MHCLG figures show England delivered around 208,600 net additional dwellings in 2024/25 – a 6% fall on the prior year and the third consecutive annual decline – while several industry forecasters, including Savills, expect completions to sit closer to 150,000–167,000 a year through the rest of this decade, against a government target of 300,000 net additions annually to hit 1.5 million homes this parliament.

The build-out gap is not evenly distributed. London illustrates the extreme case: planning permissions in the capital have fallen to their lowest level since HBF's Housing Pipeline records began in 2006, with completions down around 12% year-on-year and private housing starts more than halving in H1 2025. Building Safety Regulator delays, a 35% affordable housing requirement, and weak investor demand for flats have combined to choke delivery even where land and consent exist. Regional growth corridors – parts of the Midlands, the North West and the East of England – are showing comparatively stronger build-out relative to their approved pipeline, a divergence that matters more to underwriting decisions than any national average.

For lenders and investors, the practical implication is that a large bank of granted permissions is not, on its own, a supply signal. Section 106 negotiations are also slowing the pipeline further: industry data suggests the average Section 106 agreement now takes well over a year to conclude, with thousands of already-built affordable units sitting uncontracted while registered providers weigh capacity and funding.

What this means for developers, lenders and investors

The sensible response to a submissions surge is discipline rather than optimism. Two authorities with identical application growth can show very different conversion rates into granted, then started, then completed units – and that difference has a direct bearing on land acquisition risk, drawdown scheduling and GDV assumptions. Tracking scheme-level progression from application through decision to construction start, rather than headline submission counts, is the more reliable read on near-term supply.

REalyse comparables and planning-status data can help separate genuinely viable, well-located pipeline – where local plans are adopted, infrastructure is in place and historical approval rates are strong – from speculative or outline-stage applications that may sit dormant for several planning cycles. For development finance in particular, current sale price and rent assumptions should be tested against build-cost inflation and local absorption rates before capital commits to a site that holds consent but has no clear start date.

Outlook

England's planning system is undeniably busier than it has been in years, and rising application volumes are a necessary precondition for higher housebuilding. But on the evidence to date, the surge is better described as a surge in intent than a surge in delivery. Until approval rates stabilise, decision timescales shorten meaningfully, and viability improves enough to convert consents into committed starts, the gap between planning activity and housing outcomes looks set to remain the more important number for the sector to watch through 2026 and beyond.