Planning approvals for new homes in England have fallen to a record low, casting doubt on the government’s ambition to deliver 1.5 million new homes by the next general election. Official data reveals that fewer than 29,000 housing projects received permission from councils in the year ending June 2025, the lowest level recorded since comprehensive tracking began. This marks a significant downturn during Labour’s first year in office, a period in which the government had pledged to accelerate house building. The new housing secretary, Steve Reed, described these figures as "unacceptable" and vowed to explore every avenue to meet the target of 1.5 million homes, emphasising that reforms to the planning system "won't happen overnight."

The challenge is stark: to meet the government’s manifesto commitment, England would need to approve roughly 300,000 new homes annually, but current figures fall far short of this target. Data from housing contractor Glenigan echoes official statistics, showing about 221,000 homes were granted planning permission in the year to June 2025, down from 237,000 the previous year. Moreover, the total number of planning applications decided by councils has also declined, yet councils are approving a larger share of those they consider — around 75% compared to 71% the year before. This suggests some efficiency gains in decision-making even amid falling application volumes.

Quarterly figures underscore the severity of the drop: in the first quarter of 2025, planning approvals plummeted to 39,170, a 55% fall from the previous quarter and 32% lower than the same period in 2024. This represents the lowest quarterly figure since 2012 and is described by the Home Builders Federation (HBF) as "disastrous." The number of approved sites, a critical indicator for future building activity, hit a record low of just 9,776 projects — the smallest total since HBF started reporting in 2006. This ongoing decline significantly hinders efforts to meet the government’s annual target of around 370,000 new homes.

Regional disparities also illustrate the complexity of the housing crisis. While areas like the East Midlands, London, and the West Midlands saw notable decreases in approvals (16%, 14%, and 11% respectively), the North West experienced a 25% rise in planning permissions, reflecting uneven progress across the country. Despite these variances, national figures represent a concerning trend, with the total number of planning permissions in 2024 falling to 242,610 homes, the lowest since 2014.

Labour’s housing secretary, Steve Reed, has pledged reforms aimed at unlocking building potential, such as working with the Mayor of London on housing development and improving the performance of the Building Safety Regulator. He also reiterated plans to enhance housing targets for local councils and highlighted the £39 billion government investment committed over ten years to boost social and affordable housing construction. Nonetheless, the scale of the current planning shortfall signals that more urgent and sustained action will be required.

Critics from the Conservative Party argue that Labour’s flagship planning reforms have failed to deliver the promised "build, build, build" approach. Shadow housing secretary Sir James Cleverly has pointed to the sharp decline in approvals as evidence that policies are not working effectively. Meanwhile, housing industry experts acknowledge the challenges but remain cautiously hopeful, noting that the government’s stated commitment to reforming planning and increasing build rates may eventually bear fruit, albeit over a longer timeline.

Government ministers have also pointed to the legacy of the previous Conservative administration as a factor in the slowdown, suggesting that accumulated issues in the housing sector have taken time to address. Energy performance certificate (EPC) data, a timely indicator of new home completions, shows a decrease in new homes receiving their first EPC during Labour’s initial year in office, underlining a lull in actual building activity accompanying the planning permission decline.

Overall, the precipitous fall in planning approvals poses a formidable obstacle to the government’s housing ambitions. Without significant improvements in both the quantity of permissions granted and the speed of delivery, the promise to provide millions of new homes and tackle England’s housing shortage risks remaining unfulfilled.

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Source: Noah Wire Services