Planning approvals for new homes in England have declined sharply, reaching their lowest level since 2012, according to recent industry data. In the three months ending June 30, just over 51,000 homes received planning permission, marking an 18 to 20 percent drop compared with the previous quarter. Over the year to the end of June, approximately 214,500 new homes were granted approval, a decrease of about 8 percent from the previous year and significantly below levels seen earlier in the decade.
The Home Builders Federation (HBF), which compiled the data, highlighted the sustained downward trend as a growing concern amid government efforts to increase housing supply. The current figures represent less than 60 percent of the annual starts needed to meet the target of 300,000 net additional homes per year set out in the national planning policy framework. Larger developments—those with ten or more units—saw the steepest decline, with approvals falling more than 20 percent in the most recent quarter. Smaller sites of one or two homes made up roughly half of all approvals in the first half of the year.
Neil Jefferson, chief executive of the HBF, described the situation as a "housing pipeline being squeezed to historically low levels," citing several contributing factors. These include rising construction costs, higher taxes, new regulatory requirements, and lack of affordable mortgage lending, which together are making many housing projects economically unviable. The average cost to build a new home has reportedly increased by around £76,000, and upcoming levies related to building safety may add further expenses.
The slowdown in planning permissions is impacting overall housing delivery and has raised questions about the government’s ability to meet ambitious construction targets. Labour’s pledge to build 1.5 million homes, including both private and social housing, by the next election appears increasingly unlikely to be realized. Housing secretary Angela Rayner recently acknowledged the target has only a "slim chance" of being met, citing external pressures such as geopolitical tensions and inflationary pressures.
Industry voices have emphasized the importance of government support for first-time buyers in stimulating demand and encouraging developers to commit to new projects. The previous Help to Buy scheme was credited with boosting developer confidence and housing output, a dynamic some believe could recur under proposed initiatives such as the Your First Home equity loan program. The government’s recent introduction of a new first-time buyer support scheme received cautious approval from the HBF, which called it a "hugely welcome step" that may help alleviate some market constraints.
Despite differing figures on exact quarterly totals, sources agree the housing approvals pipeline is under significant strain. The consensus underscores the challenges facing the sector as it balances economic pressures, policy shifts, and the ongoing need for increased housing supply.