BLOGS

The UK housing crisis has reached a critical juncture. With 1.3 million households on social housing waiting lists and over 170,000 homeless children in temporary accommodation, the government's commitment to deliver 1.5 million new homes this Parliament has never felt more urgent — or more challenging.

December 2025 marked a turning point in planning policy, with the Planning and Infrastructure Act receiving Royal Assent on 18 December and the Ministry of Housing, Communities and Local Government launching its most ambitious consultation on the National Planning Policy Framework (NPPF) in over a decade. But as REalyse data on planning applications and development pipelines reveals, the path from policy reform to completed homes remains fraught with obstacles.

The December 2025 reforms: a seismic shift in planning policy

The Planning and Infrastructure Act 2025 represents the most comprehensive overhaul of England's planning system since the introduction of the original NPPF in 2012. Key provisions include:

• Default approval for station-adjacent development: Housebuilding near well-connected train stations will receive a presumption in favour of approval, potentially unlocking substantial urban and suburban densification.

• Streamlined environmental processes: Natural England's role has been reformed to reduce duplication, with standard guidance for local authorities on straightforward cases and greater discretion for higher-risk applications.

• Expanded planning capacity: An additional £48 million has been allocated to recruit approximately 1,400 new planning officers — nearly five times the original manifesto commitment of 300.

• Simplified biodiversity requirements: Area-based exemptions for sites up to 0.2 hectares, with consultation on targeted exemptions for brownfield residential development up to 2.5 hectares.

• Grey belt release: Building on December 2024 changes, low-quality green belt land can now be released for housing and infrastructure, addressing one of the most contentious barriers to development.

The government projects these reforms will inject up to £7.5 billion into the UK economy over the next decade and deliver the highest level of housebuilding in over 40 years, according to OBR forecasts.

The delivery reality: Q2 2025's sharp decline

Despite the policy momentum, on-the-ground delivery has moved in the opposite direction. Official MHCLG statistics show new-build completions in England fell to 34,990 (seasonally adjusted) in Q2 2025 — a 19% drop compared to Q2 2024 and 25% below the 2021 Q1 peak.

The weakness extends across the pipeline:

• Planning approvals at 12-year lows: Just 42,239 homes were approved in Q2 2025, down 19% year-on-year and the weakest second quarter since 2012.

• Net additions falling short: England delivered 208,600 net additional dwellings in 2024-25, a 6% decline from the previous year and well below the 300,000 annual rate required to meet the 1.5 million target.

• London in crisis: Private housing starts in the capital more than halved, with just 731 homes started in H1 2025. Planning permissions hit record lows, and completions fell 12% year-on-year.

• Affordable housing contracting: Social rent starts collapsed 38% in the six months to September 2025, with affordable rent down 24% and intermediate schemes down 68%.

REalyse planning data shows these national trends reflected across most English regions, with development pipelines shrinking as delayed permissions work through a constrained construction sector.

Early signs of recovery: Q4 2025 uptick

The latest quarterly data offers cautious optimism. Q4 2025 saw dwelling starts rise 23% compared to Q3 and 24% versus Q4 2024, reaching 37,300 (seasonally adjusted) — the strongest quarterly increase since the post-pandemic recovery.

Planning application volumes tell a more encouraging story still. According to Planning Portal data, 109,000 new homes outside London were applied for between October and December 2025 — up 61% on the same period in 2024. For the full year, applications for 335,000 homes were lodged outside the capital, a 60% increase on 2024.

This surge aligns with the government's reform timeline. TerraQuest, which operates the Planning Portal, attributes the growth to streamlined processes and grey belt reforms enabling "applications that wouldn't have previously" come forward.

REalyse data indicates particular strength in growth corridors with strong transport links — precisely the locations prioritised under the new station-adjacent densification policies. Areas like Milton Keynes, Central Bedfordshire, and South Cambridgeshire continue to dominate completion hotspots, while major cities including Manchester, Birmingham, and Leeds see sustained apartment development.

The implementation challenge

Industry reaction has been cautiously positive but pragmatic. The Home Builders Federation welcomed measures that could speed permissions for smaller developers but noted that "local authority capacity and access to suitable land will still determine how quickly homes can be built."

Several structural challenges remain:

• Planning officer shortages: Despite the recruitment drive, RTPI data shows a 29% reduction in funding for planning policy teams over the past 15 years. The 1,400 new officers will help but cannot immediately reverse years of underinvestment.

• Construction sector constraints: Labour shortages, rising material costs, and regulatory complexity — including the Building Safety Levy and Future Homes Standards — continue to pressure housebuilder margins.

• Viability pressures: Affordable housing delivery relies heavily on Section 106 contributions, but challenging viability conditions on many sites are squeezing the pipeline.

• Build-to-rent contraction: The institutional rental sector saw starts fall 43% and completions drop 35% in the year to June 2025, with 13% fewer homes under construction — a significant loss of delivery capacity.

Outlook: from ambition to action

The 1.5 million homes target remains mathematically achievable but requires an unprecedented acceleration. At the current delivery rate of approximately 204,000 homes annually, England would fall roughly 500,000 homes short by 2029.

For the reforms to translate into completed dwellings, several conditions must align:

1. Planning capacity must scale rapidly: The additional officers need to be recruited, trained, and embedded in local authorities within months, not years.

2. Viability must improve: Lower interest rates, stable material costs, and flexible Section 106 negotiations are essential to unlock stalled schemes.

3. London must recover: The capital's collapse represents a significant drag on national numbers. October 2025's fast-track powers for the Mayor of London need to show results quickly.

4. SME builders must return: The reforms include targeted support for small and medium housebuilders, whose share of completions has halved over two decades.

REalyse will continue to track planning applications, permissions, and development activity across England to monitor whether December 2025's reforms can bridge the gap between policy ambition and housing delivery. The data so far suggests the foundations are being laid — but the construction has only just begun.