BLOGS

The ambition is clear. The pipeline is not.

When the government revised the National Planning Policy Framework (NPPF) in December 2024, it sent an unambiguous signal: England would build more homes, faster, or planning policy would be wielded as a lever to force councils into line. Mandatory local housing need targets were restored. The "grey belt" — previously developed or low-quality green belt land — was formally unlocked for development. A new standard method pushed the national requirement above 370,000 new homes per year, the highest figure ever set by government.

The politics were bold. The planning pipeline, however, tells a more complicated story.

REalyse data, drawn from residential planning applications across England, shows that the number of refused residential applications has climbed every year since 2023 — from 182 in 2023 to 246 in 2024, and already 261 in the first half of 2025 alone. More telling still: the average size of granted schemes has collapsed. In 2023, the average granted residential application delivered 27 units. By 2024 it had fallen to 21. By mid-2025, it had dropped to just 13.6. Fewer large schemes are making it through. Smaller, lower-impact applications are filling the gap.

This is what a constrained system looks like from the inside.

The local plan gap: planning in a policy vacuum

At the root of the problem is a local plan crisis that has been building for years. The government's own figures suggest fewer than half of English local planning authorities (LPAs) have an adopted local plan less than five years old — the threshold used by the NPPF to determine whether a council can resist speculative development. Where plans are out of date, the "tilted balance" is supposed to apply, in theory favouring development. In practice, many councils in plan-making limbo are simply refusing more, gambling that inspectors or courts will back them.

Councils including Woking, Thurrock, and several South East authorities have faced financial collapse or governance failure that has effectively frozen plan-making for years. Others — including a number of Greater Manchester and West Yorkshire districts — are mid-way through complex Strategic Development Plan processes that will not produce adopted documents before 2027 or 2028. In those areas, the planning rulebook is effectively blank.

REalyse planning data for 2024–25 highlights Birmingham and Newham among the local authorities recording notable volumes of refused residential applications — 40 and 12 refusals respectively, with Newham alone blocking 68 units across those decisions. These are not peripheral markets: they sit in two of England's highest-demand cities, where undersupply is already pushing rents and values sharply higher.

The pipeline data adds further context. Of all residential schemes submitted or first published in 2024–25, 323 applications covering approximately 7,100 proposed units remain stuck "In Progress" — applications that have been submitted but not yet decided. Meanwhile, 244 schemes representing over 600 units have already been withdrawn, often a sign that applicants concluded consent was unlikely and cut their losses before a formal refusal.

Green belt: reform on paper, resistance on the ground

The government's grey belt policy was supposed to cut through the green belt deadlock. In principle, land that sits inside the green belt but offers low landscape, biodiversity, or recreational value is now a legitimate development target. In practice, the reform has run headlong into two stubborn obstacles: local political resistance and legal uncertainty.

Councils in the Surrey and Hertfordshire green belts, along with commuter-belt authorities in Buckinghamshire and Oxfordshire, have openly challenged the grey belt designation process, arguing that the criteria are too vague to apply consistently. Several have appealed to the Planning Inspectorate or sought judicial review of decisions that approved schemes on what they regard as strategic green belt. The result is a two-to-three-year window of litigation risk that is deterring even well-capitalised developers from committing capital to grey belt sites.

The appeal pipeline itself is swelling. Planning inspectors are already operating under significant pressure, with major infrastructure inquiries — including data centre clusters, logistics parks, and renewable energy schemes — competing for the same finite pool of inspector time. Housing appeals, historically resolved in twelve to eighteen months, are now routinely taking twenty-four months or longer in contested areas. That delay compounds viability pressures in a market where build costs have risen sharply since 2022 and finance costs remain elevated.

Nutrient neutrality: the invisible blocker

If green belt battles dominate the political headlines, nutrient neutrality rules have quietly become one of the most significant structural constraints on housing delivery in England — particularly across the Solent, Humber, and Wye catchment areas.

Natural England's requirement that new development must not increase nutrient loads in protected river catchments has effectively frozen consents in parts of Hampshire, Somerset, Norfolk, and the Midlands. Developers applying for permission in affected zones must demonstrate that their scheme will achieve nutrient neutrality — through on-site mitigation, the purchase of nutrient credits from certified wetland or farmland restoration projects, or payments into council-managed mitigation schemes.

In theory, mitigation markets provide a solution. In practice, supply is thin, prices are opaque, and the time to procure credits can add six to twelve months to a planning timeline. The Planning and Infrastructure Bill, progressing through Parliament in mid-2025, contains provisions intended to create a more liquid and regulated credit market — but implementation timelines suggest most affected catchments will not see meaningful relief before 2026 or 2027.

REalyse planning pipeline data shows that the "In Construction" stage remains critically underweighted relative to consented supply: just 51 schemes and roughly 7,550 units are actively on site across the 2024–25 dataset, against 1,380 consented applications carrying nearly 13,700 units that have not yet broken ground. The gap between consent and construction is exactly where nutrient neutrality delays, viability gaps, and appeal uncertainty accumulate.

The delivery arithmetic does not add up

Ministers have framed their 1.5 million homes target — approximately 300,000 per year across the Parliament — as non-negotiable. National Planning Policy now explicitly states that housing delivery will be a key measure of LPA performance, with underperforming councils placed in "special measures" that strip them of the ability to resist applications.

But the arithmetic is challenging. England completed approximately 190,000 new homes in the year to March 2024, according to MHCLG figures. Even accounting for accelerated grey belt development, the government's own impact assessment suggested its planning reforms might unlock an additional 50,000 to 80,000 completions per year by the late 2020s — a range that still falls short of the annual target. And those projections were made before the wave of LPA legal challenges to grey belt designations, before the Planning Inspectorate's capacity crisis deepened, and before the full downstream impact of nutrient neutrality rules was incorporated into site-level viability assessments.

The market is already pricing in delay. REalyse comparables data in constrained planning zones — parts of the South East, the Solent catchment, and the Home Counties green belt fringe — shows land values softening on sites with unresolved planning risk, while permitted development sites continue to command a premium. Developers and investors are concentrating capital on lower-risk pipeline rather than fighting battles in the planning system.

What comes next

The Planning and Infrastructure Bill, the updated NPPF, and the grey belt policy together represent the most significant structural intervention in English planning since the 2010s. But legislative intent and pipeline reality are not the same thing. The consent-to-construction gap visible in REalyse data, the rising refusal volumes in high-demand boroughs, and the legal battles beginning to work through the courts all point to a system that will take years — not months — to align with the government's delivery ambitions.

For developers and investors, the near-term opportunity lies in the gap itself: permitted or consented sites where viability can be demonstrated, where nutrient credits are already secured, and where local plan status gives a clear policy basis for consent. Where those conditions are absent, the planning system remains what it has been for the better part of a decade — a bottleneck, not a gateway.

The government has changed the rules. The system is still catching up.