With the Labour government setting a target of building 1.5 million new homes by 2029, this declining trend, alongside recent reports of the government falling short of its first-year targets, paints a worrying picture and begs the question: what can be done?
Here, we break down recent planning permission statistics and offer ideas for how housing developers can start bucking the trend throughout the rest of 2025.
Planning permission statistics
- 50,610 units were approved in Q1 2025, a 21% decrease compared to a year prior (64,718) – Home Builders Foundation
- Residential unit approvals fell by 37% during Q1 2025, the lowest quarterly total since Q2 2012 – Home Builders Foundation
- 45,521 new housing units were given approval in England in Q1, a 37% drop from the previous quarter – Home Builders Foundation
- Almost 90% (40,949) of those were for housing schemes of more than 10 units – Home Builders Foundation
- The number of those units (40,949) also decreased by 39% compared to Q4 2024, and 20% compared to Q1 2024 – Home Builders Foundation
- Between July 9th 2024 and June 15th 2025, 186,600 net additional homes were delivered in England, comprised of affordable housing, self-builds, and private new builds – Joseph Mullane, Homebuilding
- This means the government is 113,400 homes short of its annual target – Joseph Mullane, Homebuilding
- 87% of the 90,700 applications received in England between January and March 2025 were approved, down 9% from the same quarter in 2024 – uk
How can developers and brokers beat the trend?
It’s clear that, if current trends continue, the UK risks failing to meet its target of 1.5 million new homes. So, what can be done?
1. Address common reasons for rejection
Although the exact reasons why application approvals are decreasing are unclear from a planning perspective, understanding common reasons for rejection can help to streamline the process, mitigate barriers, and increase the likelihood of approval.
Some common reasons for planning permission rejection include:
- Lack of demand
- Privacy concerns for neighbours
- Aesthetic/character differences with other homes/buildings
- Risk of overloading schools, GPs, and local utility providers
- Negative impacts on wildlife
- Use of hazardous materials
2. Seek out brownfield development opportunities
Following revisions to the National Planning Policy Framework, the government has instructed a “brownfield-first” approach to its planning system. Under this approach, developers are encouraged to redevelop previously used land rather than develop on unused land.
“The default answer to brownfield development should be “yes”, as the first step on the way to delivering brownfield passports.” – Gov.uk
Greenfield land is often associated with tighter planning restrictions, making it more difficult to receive approval.
Read more: Building on greenfield sites: is it possible?
3. Control your costs
With property developers seeing increased costs under the upcoming Future Homes Standard, as well as ever-rising materials prices, they may find that the cost of developing new sites will continue to escalate.
This adds yet more complexity for developers to navigate. Therefore, keeping a close eye on development costs, while also anticipating further increases, is highly recommended. This can help address the profitability of a development right from the beginning. For example, increasing contingency reserve on build costs to 7-10% gives greater flexibility to accommodate unforeseen cost increases as a result of tariffs etc.
4. Strategic funding options
With planning approvals being lower than in previous years, any applicable land for development is sure to catch the eye of other developers. This can lead to intense competition in securing that land.
Products like bridging finance, for example, offer prompt access to a short-term loan which can be used to lock down the purchase of desirable development sites much faster than competing developers.
Conquer the housing market, with Phoenix Funding
Housing development can be hard to navigate. To fund your endeavours, make sure you choose a trusted, experienced lender, like Phoenix Funding. Our team has several years of experience working across a range of both small and large-scale developments. For more information on our team and products, get in touch with the Phoenix Funding team today.