BLOGS

The great disconnect: transactions recover, completions falter

The UK housing market has entered an uncomfortable paradox. After two years of mortgage-rate turbulence, transaction volumes have steadied—quarterly sales sat comfortably above 270,000 in the second half of 2025—yet the supply of new homes continues to contract. REalyse data shows that new-build transactions accounted for just 1% of all sales in Q3 2025, a sharp fall from over 11% in mid-2024. While the secondary market digests existing stock, the pipeline of fresh supply is thinning at exactly the moment policymakers need it most.

This disconnect matters because housing supply operates on long lead times. The schemes breaking ground today were approved two or three years ago; the approvals granted tomorrow will not deliver homes until 2028 or beyond. If the planning system slows now, buyers and renters will feel the consequences well into the next decade.

Planning reform: much promised, little delivered

The government's Planning and Infrastructure Act received Royal Assent in December 2025, heralded as "landmark" legislation to accelerate housing and infrastructure. Ministers have trumpeted a target of 1.5 million new homes within this parliament and 150 major infrastructure decisions before the next election. Yet nearly six months on, the secondary legislation required to bring key provisions into force remains absent, and local planning authorities continue to wrestle with chronic underfunding and staff shortages.

REalyse planning data underlines the strain. Average decision times for residential applications now exceed five months—over 160 days on average—with complex schemes routinely taking longer. The pipeline of pending applications remains bloated: in Q4 2025 alone, more than 200,000 residential units sat in limbo awaiting determination. Each month of delay translates into lost construction output and fewer homes reaching a market already undersupplied.

The numbers tell the story

A closer look at the planning pipeline reveals a troubling trend. While approval rates remain healthy—applications that reach a decision still achieve consent at robust rates—the sheer volume stuck at "pending" status has ballooned. REalyse analysis shows withdrawn and refused applications together account for a rising share of the total, reflecting developer frustration with protracted timelines and policy uncertainty.

Meanwhile, new-build transaction volumes have collapsed relative to the broader market. In Q2 2024, more than 31,000 new homes changed hands; by Q1 2026, that figure had fallen to just 135 in available registrations, a staggering drop that partly reflects registration lag but also points to weaker forward sales and a developer pullback. Average new-build prices remain elevated—hovering around £400,000—yet buyers face fewer choices and longer waits for completed units.

The wider market has not escaped unscathed. Overall transaction volumes dipped below 250,000 per quarter by late 2025 and early 2026, with year-on-year declines exceeding 20% in several months. A stabilising mortgage environment has not been enough to offset the headwinds from stamp duty costs, affordability pressures, and—crucially—a lack of suitable stock.

What needs to change

For the government's housing ambitions to become reality, three shifts are essential.

First, planning capacity must be funded properly. The promise of 1,400 new planning officers and £48 million in additional funding is welcome, but recruitment and training take time. Local authorities need certainty that resources will flow consistently, not in one-off bursts.

Second, reforms must be implemented, not just announced. The Planning and Infrastructure Act contains sensible measures—national delegation schemes, streamlined compulsory purchase rules, spatial development strategies—that remain on paper. Ministers should publish clear timelines for secondary legislation and hold themselves accountable to them.

Third, developers need policy stability. Each successive revision to the National Planning Policy Framework (NPPF) creates transitional uncertainty. The December 2025 draft NPPF proposed the most significant overhaul in over a decade; consultation runs until March 2026, but final adoption could slip further. Housebuilders cannot commit capital to new sites when the rules may change mid-project.

Outlook: a supply squeeze in waiting

REalyse data points to a housing market that is recovering on the demand side but fraying on the supply side. Transactions are stabilising, prices in many areas are holding firm, and rental demand remains intense—particularly in urban centres where affordability pressures are acute. Yet without a meaningful acceleration in planning approvals and construction starts, the gap between what the market needs and what it can deliver will only widen.

The government's rhetoric has been strong; the challenge now is execution. Planning reform that remains stuck in consultation does nothing for the families struggling to find a home, the developers unable to break ground, or the local economies waiting for construction investment. The clock is ticking.