New planning applications for nearly 70,000 homes were submitted across England in the second quarter of 2025, marking a significant 33% increase compared to the same period in 2024. According to TerraQuest, whose platform processes about 95% of planning applications in England, 232,692 planning applications were lodged from April to June, with proposals for 69,597 new homes—a reversal of a three-year downward trend in planning activity. This surge brings the total number of homes proposed in the first half of 2025 to around 141,000, up from 101,000 in the first six months of 2024, though it remains slightly below the 149,000 proposed by mid-2023.

TerraQuest’s chief executive Geoffrey Keal attributes this rise to increasing confidence within the development sector, likely influenced by favourable government policy signals such as the updated National Planning Policy Framework (NPPF) and the ongoing Planning and Infrastructure Bill currently under consideration in the House of Lords. Keal noted that planning application figures serve as an early market sentiment indicator since they represent the earliest stage in the development process, often months ahead of actual construction activity. Despite this optimism, the figures are yet to fully align with the government’s ambitious target of delivering 1.5 million new homes, but they signal a foundation being laid for greater future activity as planning reforms continue to be implemented.

Regionally, the increase in home proposals was evident across seven of England’s eight regions, with the East Midlands and West Midlands experiencing the sharpest rises of 83% and 72% respectively. These areas have also seen growth compared to the same quarter in 2023, alongside gains in the North East, while the North West lagged behind the rest of the country. Mary-Jane O’Neill, head of planning at Lambert Smith Hampton’s London and South region, highlighted that the December 2024 updates to the NPPF have encouraged more speculative and strategic planning submissions, especially in areas with local plans under review or withdrawn. She pointed to a softer housing delivery test and reinforced support for brownfield development as factors reducing risk for developers and stimulating pre-application engagement and design-led discussions—signs of underlying market confidence.

While planning applications and intentions are rising, the challenge remains in translating these proposals into actual homes. Industry data reveals significant delays in the determination of planning applications, with the average decision time for major residential projects now almost three times longer than in 2014—averaging 783 days. Such delays severely threaten the government’s ability to meet the 1.5 million home target and highlight ongoing systemic issues within the planning process. Furthermore, despite the growing number of applications, planning approvals for new homes have fallen to a decade low, with only 242,610 homes granted permission in 2024—a 2% decrease from 2023 and a steep 26% drop from 2019, indicating a bottleneck between planning submission and approval.

The first quarter of 2025 saw a record low in the number of planning permissions granted, with just 2,064 new home building sites approved—a 16% decline from the previous quarter according to the Home Builders Federation. This ongoing approval shortfall exacerbates the risk to national housing delivery goals and underscores calls within the sector for more effective government intervention. The UK government’s proposed overhaul of the planning framework includes mandatory housing targets for councils, aiming for 1.5 million new homes, with added measures such as reviewing greenbelt boundaries and requiring that 50% of new homes be affordable. These reforms are designed to address the housing shortage and stimulate economic growth, though their success will depend on streamlining the planning system and overcoming existing delays.

Simultaneously, homebuilders have shown growing confidence, with planning applications increasing in 2024 by 3%, and an uptick in larger developments being proposed. The average size of these applications rose from proposing 126 homes in 2023 to 142 in 2024, reflecting both an optimistic outlook driven by anticipated reforms and positive economic conditions.

In summary, while the spike in planning applications in early 2025 suggests a nascent recovery in England’s housing market, realising the government’s ambitious building targets will require addressing the stubborn challenges of prolonged planning delays and low approval rates. The sector’s current trajectory of increased intent to build may ultimately help lay the groundwork for an upswing in housing supply, but the pace and scale of delivery depend heavily on the efficacy of ongoing and future planning reforms.

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Source: Noah Wire Services