BLOGS

The gap between ambition and delivery

The UK's housing shortage has dominated political discourse for years. Each government promises to cut through planning red tape and get Britain building. Yet the latest data tells a more complex story: planning approvals are declining, and a significant backlog of consented schemes has yet to break ground.

REalyse analysis of residential planning applications shows that approvals peaked in 2021 at nearly 23,000 applications covering over 500,000 homes. Since then, the trajectory has been downward. In 2023, approvals fell by 17% year-on-year—the sharpest single-year decline in recent memory. While 2024 brought a partial recovery in unit numbers, the number of applications approved continued to slide.

By 2025, the system approved approximately 15,200 residential schemes totalling around 397,000 units. That represents a drop of more than 100,000 units per year compared to the 2021 high point.

Where are the homes being approved?

Regional disparities in planning activity remain stark. Central London continues to dominate, with nearly 95,000 units approved since 2023—though this comes alongside an approval rate of just 51%, the lowest of any major region.

Greater Manchester follows with around 47,500 units approved at a 55% approval rate. The West Midlands matches this rate while delivering approximately 41,200 units. Scotland's Strathclyde region stands out with a notably higher approval rate of 64%, suggesting local planning authorities there may be processing applications more efficiently.

Yet approval rates alone do not guarantee delivery. Cambridgeshire approved over 32,400 units in the same period, but the region hosts several large schemes that have been stuck in pre-construction phases for years.

The stalled pipeline: approved but not started

Perhaps the most telling indicator of the gap between planning reform and actual housebuilding lies in the schemes that have secured consent but never started.

REalyse data identifies over 93,000 units across roughly 1,600 schemes that have planning approval but show no sign of construction commencement. Some of the largest consented schemes in the country—including a 44,000-unit development in Milton Keynes approved in 2007 and a 20,000-unit project in East London from 2010—remain classified as "in progress" without having completed delivery.

Meanwhile, approximately 1.77 million units sit under construction across nearly 30,000 active schemes, and 827,500 units in over 87,500 schemes have reached completion since 2020. The pipeline is moving, but the gap between approvals granted and spades in the ground reveals a systemic bottleneck.

Why approvals do not guarantee starts

Planning reform addresses only one constraint in the development process. Even with consent in hand, developers face a gauntlet of challenges before construction begins:

• Viability pressures: Rising construction costs, elevated interest rates, and uncertain sales values have rendered many approved schemes financially unworkable

• Infrastructure requirements: Section 106 obligations and Community Infrastructure Levy payments can delay commencement while developers negotiate affordable housing contributions

• Skills and capacity: Labour shortages in construction limit how many schemes can progress simultaneously

• Strategic land holdings: Some developers bank consented sites, releasing them only when market conditions favour maximum returns

The result is a planning system that may be approving homes at a reasonable rate while delivery mechanisms downstream fail to convert permissions into completed dwellings.

Regional approval rates suggest planning is not the primary barrier

Interestingly, approval rates across most regions hover between 50% and 65%—suggesting that the planning system is not categorically rejecting development. Lincolnshire achieves a 68% approval rate; South Yorkshire and Strathclyde exceed 62%. Even in tightly constrained areas such as Essex and the Home Counties, more than half of applications receive consent.

If planning were the principal obstacle, one might expect far lower approval rates. Instead, the data implies that the bottleneck lies elsewhere—in the space between approval and the first foundations being poured.

Outlook: reform must look beyond planning

The government's housing targets—now aiming for 1.5 million homes over the current parliament—require approximately 300,000 completions annually. To achieve this, reform must extend beyond planning committees and into the financing, construction, and delivery stages of development.

Measures that could accelerate the stalled pipeline include:

• Use-it-or-lose-it provisions: Requiring developers to commence work within a defined period or forfeit consent

• Public sector intervention: Direct commissioning of homes on consented sites where private developers have stalled

• Affordable housing flexibility: Allowing viability reviews on legacy consents to unlock stuck schemes

• Infrastructure funding: Front-loading infrastructure delivery to remove pre-commencement delays

Planning reform remains necessary, but it is not sufficient. The data shows that the UK knows how to approve homes. The challenge is ensuring they actually get built.