BLOGS

A housing crisis meets an ambitious target

Labour's commitment to deliver 1.5 million new homes over the course of this parliament has placed the planning system squarely in the spotlight. After years of delays, appeals, and resource constraints, the new government's planning overhaul represents the most significant intervention in housing delivery in a generation.

The stakes are clear. REalyse planning data shows that over 540,000 residential units currently sit in the pipeline marked as "on hold" or "shelved"—schemes that have secured some form of approval or progressed through planning but stalled before breaking ground. These aren't speculative proposals. They represent real sites, real consents, and real opportunities to close the gap between planning permissions granted and homes actually built.

Unlocking even a portion of this dormant supply could transform housing delivery. But doing so requires addressing the systemic bottlenecks that have accumulated across local planning authorities, infrastructure providers, and the development sector itself.

The scale of the stalled pipeline

REalyse analysis of the UK residential planning pipeline reveals the full extent of the challenge. Across England, Scotland, Wales, and Northern Ireland, over 190,000 schemes representing 542,000 residential units are currently classified as on hold or shelved.

The geographic distribution is telling. Central London leads with nearly 59,000 stalled units across more than 14,500 schemes—a reflection of the capital's complex planning environment, elevated construction costs, and viability challenges. The South East dominates the next tier: Kent holds over 23,400 stalled units, Surrey nearly 19,700, and Essex approximately 19,400.

Beyond the commuter belt, major regional centres also carry significant backlogs. The West Midlands has over 19,300 stalled units, Greater Manchester nearly 15,000, and West Yorkshire roughly 12,700. These are precisely the areas where Labour's growth-focused reforms are expected to have the greatest impact.

Meanwhile, the pipeline continues to swell. Over 4.2 million units are currently marked as "in progress" across more than 233,000 schemes—a figure that dwarfs annual completions and underscores how slowly permissions translate into physical homes.

Where planning decisions fall short

The approval statistics tell part of the story. REalyse data shows that over 6.1 million residential units have received planning consent across 441,000 granted applications. Yet nearly 850,000 units have been refused across 152,000 applications, while a further 486,000 units have been withdrawn before reaching a decision.

This refusal rate—representing roughly 12% of units that go through the system—points to friction between local planning policy, community opposition, and developer ambitions. Labour's reforms aim to reduce this attrition through clearer guidance, mandatory housing targets, and streamlined decision-making processes.

Critically, over 1.36 million units remain "in progress" awaiting determination. With local planning authority resources stretched thin, decision timelines have lengthened considerably. The government's commitment to recruit 300 additional planning officers and establish new planning "super-squads" for major schemes directly targets this capacity constraint.

Build-to-rent as a litmus test

The institutional rental sector offers a useful barometer for how planning reforms might affect different housing segments. Build-to-rent (BTR) developments typically involve larger schemes with professional sponsors, making them particularly sensitive to planning uncertainty and approval timescales.

REalyse BTR pipeline data shows approximately 124,700 units currently in progress across 584 schemes, with a further 113,600 units already completed. However, roughly 9,500 BTR units across 54 schemes remain stalled, while over 3,500 units have been cancelled outright.

The BTR sector's relatively lower stall rate compared to the broader market reflects the institutional capital backing these projects and the ability to weather extended planning processes. Yet reforms that accelerate decision timescales and provide greater certainty around permission validity could unlock additional capacity—particularly in regional cities where BTR has been slower to establish itself.

What the reforms could change

Labour's planning overhaul operates on several fronts. The reinstatement of mandatory housing targets for local authorities removes the discretion that allowed some councils to set artificially low ambitions. Updated National Planning Policy Framework (NPPF) guidance strengthens the presumption in favour of sustainable development and limits grounds for refusal on non-material considerations.

Grey belt policy—allowing development on lower-quality green belt land near existing urban areas—could unlock sites that have long been off-limits. Early indications suggest this could be particularly significant in the South East, where green belt constraints have concentrated demand and pushed prices to affordability extremes.

New planning "super-squads" and targeted resources for local authorities address the capacity question directly. With many planning departments operating below establishment levels and struggling with recruitment, additional investment could meaningfully reduce determination timescales.

For developers and investors, the implication is clear: schemes that have stalled due to planning uncertainty or slow determination timescales may become viable again. Sites that were previously marginal could cross viability thresholds as holding costs reduce and certainty increases.

The road to 1.5 million

Delivering 1.5 million homes over five years requires an average of 300,000 completions annually—well above recent performance. In the year to March 2024, England delivered approximately 220,000 net additions, leaving a substantial gap to close.

The arithmetic suggests that unblocking the stalled pipeline is necessary but not sufficient. Accelerating in-progress schemes through to completion, reducing refusal rates, and expanding the supply of permissioned land all contribute to the solution. So too does addressing the skills shortage, materials constraints, and financing conditions that affect delivery even after planning consent is secured.

REalyse data provides visibility into where these opportunities concentrate. Local markets with high volumes of stalled or in-progress units, combined with strong underlying demand and improving viability metrics, represent the most promising targets for accelerated delivery.

Conclusion

Labour's planning reforms represent a genuine attempt to address structural constraints that have limited housing supply for years. The scale of the stalled pipeline—over 540,000 units across nearly 191,000 schemes—provides both a challenge and an opportunity.

Success will depend not just on policy changes but on implementation: recruiting planning officers, establishing new decision-making processes, and embedding a genuine presumption in favour of sustainable development across local authorities. For investors, developers, and housing professionals, tracking how these reforms translate into actual planning outcomes will be essential.

The race to 1.5 million homes has begun. REalyse will continue to monitor the pipeline, providing the data-driven insights needed to identify where delivery is accelerating and where further intervention may be required.