BLOGS

A widening gap between ambition and approvals

The government's commitment to 1.5 million new homes across this Parliament — roughly 300,000 a year — was always going to require a step-change in delivery. But REalyse's own planning application data suggests the system is moving in the opposite direction.

Granted residential units in England peaked in 2021 at just under 459,000, spread across nearly 22,000 approved applications. By 2025, that had fallen to around 202,000 granted units across roughly 10,400 approvals — a decline of more than 55% in granted unit volume in four years, even before accounting for how many approved schemes stall before a spade goes into the ground.

This isn't simply a story of local authorities turning more applications down. The number of applications being submitted and decided has itself contracted. Refusals have fallen too, from around 6,900 in 2020 to roughly 4,200 in 2025. What's shrinking fastest is the pipeline itself — fewer large schemes are coming forward for determination in the first place, a signal that developer confidence, viability, and land supply constraints are doing at least as much damage as planning committee caution.

Why the pipeline is thinning, not just approvals

Three forces are visible in the data and in the wider market context developers will recognise:

Viability pressure on larger schemes

The average unit count per granted application has drifted down over the period, hinting at a shift toward smaller, lower-risk schemes rather than the large strategic sites needed to move the needle on 300,000-a-year delivery. Build cost inflation, higher financing costs, and Biodiversity Net Gain and infrastructure levy obligations have squeezed the economics of bigger sites disproportionately — precisely the schemes the 1.5 million target depends on.

A slower "in progress" backlog

Applications sitting in the "in progress" category associated with very high unit volumes (over 400,000 units still undetermined in 2025, per REalyse data) point to a growing backlog of large-scale proposals awaiting decisions, rather than a system that has simply stopped receiving ambitious schemes. That backlog is itself a leading indicator: if determination times lengthen further, 2026 and 2027 grant volumes could fall again before any policy reform has time to bite.

Approval rates are still historically high — the volume problem is elsewhere

It's worth being precise here: the approval rate for decided applications has held up reasonably well, running in the high-70s to low-80s by unit volume across the period, only easing a few percentage points from 2020 highs. The crisis isn't that councils are rejecting more homes proportionally — it's that fewer homes are being proposed at scale in the first place. This distinction matters for how the Planning and Infrastructure Act should be judged: a reform aimed at speeding up committee decisions won't fix a pipeline problem rooted in viability and land assembly.

Can the Planning and Infrastructure Act 2025 and NPPF reforms reverse the decline?

The Act's toolkit — streamlined committee referrals, a stronger role for planning officers on smaller schemes, reformed developer contributions, and new powers to unlock stalled sites — targets process speed and certainty. The revised NPPF's mandatory standard method for local housing targets and its "grey belt" release provisions aim at land supply. Both are sensible responses to the symptoms visible in the data: a shrinking, slow-moving pipeline of large sites.

But process reform alone doesn't resolve the viability gap driving developers away from bigger schemes. For institutional investors and lenders, the practical read-through is that any recovery in granted unit volumes is likely to be gradual and geographically uneven — concentrated in areas where land values, build costs and rents still clear a viable margin under the new obligations. REalyse comparables and yield data across local planning authorities can help identify which districts are already seeing planning activity stabilise versus those where the pipeline continues to thin, ahead of any national-level turnaround becoming visible in the headline figures.

For agents and valuers, a slower flow of new consented stock also has second-order effects worth watching: constrained future supply typically supports asking price resilience and shorter days-on-market in the areas most affected, a dynamic worth flagging in vendor and landlord conversations even as delivery targets dominate the political conversation.

Outlook

The data makes one thing hard to dispute: hitting 1.5 million homes this Parliament requires granted unit volumes to reverse a four-year decline and then some — not just stabilise. The Planning and Infrastructure Act 2025 addresses real friction in the system, but it lands against a backdrop where fewer ambitious schemes are even reaching determination. Whether reform succeeds will show up first in the pipeline data — application volumes and unit counts submitted, not just approval rates — well before it shows up in completions. That's the metric worth watching most closely over the next 12–18 months.