The number of new home building sites given planning approval in England during Q1 2025 was the lowest since reporting began some 20 years ago, according to the latest Housing Pipeline report from the Home Builders Federation (based on Glenigan data). This means there has been less investment in new sites than during the Global Financial Crisis and the COVID-19 lockdowns.
Just 2,064 sites were given approval during Q1, a 16% drop on the previous quarter. The rolling annual number of projects approved in the year to Q1 2025 was 9,342, itself a new record low and the twelfth quarter in a row that the annual rolling number has been the lowest since the report began recording
In total, approval for just 45,521 new homes was given in Q1 – the lowest number of quarterly approvals since 2012, a 37% drop on the previous quarter and 21% drop on Q1 2024. The report starkly illustrates the urgent need for Government to address problems in the housing market and the ongoing barriers to housing supply if they are to get anywhere near the much vaunted 1.5 million homes target.
The rolling annual number of units approved in the year to Q1 2025 was just 233,695, a 5% drop on the previous 12-month period and the lowest 12-monthly outturn recorded since 2014. The figure is just 63% of the 370,000 number the Government has cited an ambition to achieve through cumulative local authority housing targets across the country.
Estimates suggest that we are currently delivering around 200,000 new homes a year, meaning that as we approach the anniversary of the election, we are already 100,000 behind the run rate needed to hit the government’s 1.5m target. With housing construction levels flatlining at best and planning permissions for new sites and new homes continuing to fall, the likelihood of imminent increases seems remote.
While the planning system changes announced swiftly following the election were very welcome, housing supply is determined by several key factors. Without further policy interventions in those other areas to address the huge constraints that remain, the industry is unable to deliver on Government’s – or indeed its own – wishes to build more homes.
Neil Jefferson, Chief Executive at the Home Builders Federation, said: “The latest planning figures are disastrous for an industry and a Government looking to increase housing supply over the coming years. With current supply flatlining and permissions for homes to be built over the next few years plummeting, unless urgent interventions are made, there seems little chance of us building the homes we know are desperately needed.
“While the government’s ambition and the swift action on planning were very welcome, increasing housing delivery requires much more than good intentions and planning reform.
“Ministers have to address the fact that potential home owners are unable to buy due to the lack of affordable mortgage lending and the absence for the first time in decades of any Government support scheme (for first time buyers). Similarly, it needs to ensure Housing Associations are financially able to purchase the affordable homes house builders deliver. Without a functioning market for private or affordable homes it is impossible for industry to deliver them.
“Planning permissions and house building levels will not increase unless ministers work with industry and tackle the issues preventing companies from pressing the accelerator and investing in the sites, skills and supply chains needed build the homes the country needs.”
Allan Wilen, Economics Director at Glenigan, added: “The drop in detailed planning approvals has been widespread, but especially marked for larger projects of 125 homes or more. While Glenigan has seen an increase in planning applications in recent months, the current decline appears to reflect earlier declines in planning applications during 2023 and the first half of last year. This underlines the long lead time to secure residential planning consent and the need to streamline the planning system.”
