New homes fall to lowest level in 13 years
The number of new homes granted planning permission in a single quarter reached a 13-year low at the start of this year, according to new figures published by housebuilder lobby group the Home Builders Federation HBF.
The report found that approval was given for only 45,521 new homes between January and March 2025, “the lowest number of quarterly approvals since 2012”.
The number represents a 35 per cent drop on the previous quarter, when planning permission for 69,723 homes was granted, and “a 21 per cent drop” on the first quarter of 2024 when 57,882 homes were consented.
Meanwhile, what the HBF called the "rolling annual number" of housing units approved in the year to Q1 2025 - or the 2024/25 financial year - was 233,695, observing that this represented “a five per cent decrease on the previous 12-month period and the lowest 12-monthly output recorded since 2014”.
The HBF claims this figure undershoots the government’s own annual housing need assessment of 370,000 homes for England - in order to meet its target of delivering 1.5 million homes over the parliamentary term - by 37%.
In addition, the research found that planning approval was given for 2,064 housing sites in Q1 2025 - which can include multiple homes - marking a 16 per cent drop on the previous quarter.
On the face of it, this is a serious blow to the Government’s ambitions of 1.5 million homes in their first term. The 370k homes per year is at this stage no more than a speck of dust on the horizon. The Government will have to very seriously speed up their stimulus to get the sector building if they want to get anywhere near the targets.
But what is it that is causing the delays? At the CCP we are very busy running consultations for a large number of sites ranging from 8 units to 3,500 units. So why are the delivery numbers so low?
I think there are two problems. The planning world is like an oil tanker, it is very slow to get going from a stand-still and to turn it takes ages. The horrendous down-turn in numbers I think is partly due to the chaos after the Truss mini budget and then the NIMBY NPPF that Gove and friends at DLUHC imposed in December 2023. When the Housing Targets were scrapped the number of applications dropped off a cliff and we know that in that period we saw a significant down-turn in live consultations.
It started picking up in September 2024 where planning applications were formulated and consultations started again. So those sites are only going in to the planning system now (or in some cases they are already at planning and waiting for determination).
But that is just one explanation. There was a bit of a down-turn again earlier this year and that can be only ascribed to the fact that the Government is very slow to actually implement their policies. Their much anticipated and much needed policies. The new NPPF arrived months after it was initially due (apparently all down to “consultation” not that anything was changed… so why not just get on with it?) and then we had the Planning and Infrastructure Bill that promised to reform the planning system (we are still waiting for it).
I suspect a lot of people read far too much into the proposed reforms and thought they might as well wait as the planning system will become a rubber stap exercise and planning committees was going to be scrapped. Not so, I fear! Very little has changed. The reality is that only developments under 10 units will avoid the Planning Committee and basically the rest will still go to the Planning Committee. Admittedly, the indication is that the committees will be more streamlined, and the members of the Committee will have to pass a training course and the certificates displayed on the Council website.
But it would be good to get the detail on this in black-and-white now so we know where we stand. If we have an application that is likely to go to the committee, we need to know so that we can prepare our clients (i.e. YOU) for the Committee. We also need to know so that we can get the locals on site and find the YIMBYs so they can make their views known (and we are quite good at that, even if I have to say so myself!)
It is the same with the Budget Review last week. Rachel Reeves was throwing around money like confetti and promising buckets full of money for SMEs etc. but… it lacked detail. One of the first questions I was asked by a prospective client is: “How can I get some of this money to build some houses” and I fear, the answer is: “I don’t know… I don’t think anyone knows yet… the mechanisms is not there yet!”.
The same goes for the New Towns Commission that was supposed to have announced the first tranche in November last year… We are still waiting with no clarity on when the announcement is coming.
This is something the Government really have to get to grips with. If they want to buck this downward trend and get anywhere near their flagship policy to deliver 1.5 million homes, they need to give the industry a lot more certainty.
Here is a handy list for the Government:
Announce the New Towns!
Get the Planning and Infrastructure Bill through
Give the guidance on how planning committees and the scheme of delegation will work.
How can SMEs access the money to deliver the houses you need?
William Borwick - Director, The CCP