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The housing delivery crisis in numbers

The UK's housing supply problem is not new, but the data now paints an increasingly stark picture. REalyse analysis of planning application trends reveals that residential planning submissions have fallen from over 36,700 in 2021 to just 23,000 in 2025—a decline of 37% in four years. Over the same period, approval rates dropped from 76.4% to 71.5%, meaning fewer applications are being submitted, and a smaller proportion of those are getting the green light.

This double squeeze has real consequences. The number of approved residential applications has more than halved, falling from 24,131 in 2021 to 11,380 in 2025. For a country that needs an estimated 300,000 new homes annually, this trajectory points firmly in the wrong direction.

Why applications are falling

Several factors are converging to suppress planning activity. Construction cost inflation, which surged through 2022 and 2023, has made many schemes unviable at current land values. Materials, labour, and financing costs have all risen sharply, forcing developers to shelve projects that no longer stack up financially.

Planning system delays compound the problem. Local planning authorities across England and Wales have faced staffing shortages and budget cuts, stretching decision timelines and increasing uncertainty for applicants. For smaller developers without the resources to absorb extended holding costs, this uncertainty is often enough to deter applications altogether.

Policy churn has added another layer of risk. Changes to nutrient neutrality rules, biodiversity net gain requirements, and building safety regulations have introduced new hurdles at various stages of the development process. While many of these policies serve important environmental and safety objectives, their cumulative effect has been to slow down and add cost to housing delivery.

The new-build shortfall in the sales market

The knock-on effects are visible in transaction data. REalyse figures show that new-build properties accounted for just 1.2% of the 746,000 residential sales transactions recorded over the past twelve months. At an average sold price of £398,370, new builds remain a premium product that many buyers cannot access.

While over 266,000 new-build listings are currently active on the market, this stock is not translating into completions at the rate needed. The gap between planning permissions granted and homes actually built suggests that viability challenges are stalling schemes even after consent is secured.

Regional disparities in planning pressure

REalyse data across 118 regions highlights significant variation in planning outcomes. Some areas, particularly in the South East and urban centres, see higher volumes of applications but also higher refusal rates. Larger strategic sites can represent thousands of units in a single application, meaning delays or refusals on major schemes have outsized impacts on local housing pipelines.

Average scheme sizes vary considerably—from single-unit applications to strategic developments of 700 or more homes. This fragmented pipeline makes forecasting local supply challenging and reinforces the importance of granular, data-led analysis for investors, developers, and lenders operating in the residential sector.

What comes next

The incoming government has signalled planning reform as a priority, with proposals to streamline local plan processes and strengthen housing delivery targets. Whether these measures will reverse the current trend remains to be seen. For now, the data suggests that supply constraints will persist, supporting values in existing stock but limiting options for buyers seeking new homes.

For property professionals—whether investing, lending, or developing—understanding local planning pipelines and approval trends is essential. REalyse continues to track planning applications, consent rates, and development activity across the UK, providing the market intelligence needed to navigate an increasingly complex housing landscape.