The Housing Pipeline report indicates that Q1 2025 saw just 39,170 approvals, the lowest number since 2012, representing a 55% decrease from Q4 2024.
The rates of new home planning permission approvals have dropped severely, even dropping by 32% from the same period last year.
The numbers are being presented as a reminder to the government that issues in the housing market and supply line must be addressed quickly.
This drop harms the chances of hitting the 1.5m target
In the year to Q1 2025, the rolling number of approved units hit 225,067, a drop of 7% year-on-year. This is also the lowest 12-monthly outturn since 2013.
An increase of 39% will be needed to reach 370,000, the figure given as the government’s ambition and the required number to reach 1.5m homes by the end of this parliament.
In terms of projects or sites approved, Q1 2025 hit 2,010, another drop of 18% from the previous quarter and the worst quarter since the reporting began in 2006.
This is likely due to less investment in new sites than during both the Global Financial Crisis and the COVID-19 pandemic. Projects approved in the year to Q1 2025 was 9,275, another record low, and the twelfth quarter in a row that has achieved a new low.
In March, the HBF also published a report showing a decade low for housing approvals.
The HBF report therefor calls for action, including:
- Bring forward effective support for first-time buyers. With uncertainty in the market and affordability stretched to breaking point, the effective demand for housing is extremely small and, for first-time buyers, often limited to those with wealthy families capable of providing financial assistance. Previous governments for the past 25 years have assisted first-time buyers with equity loans or shared equity mortgage support and for more than 60 years governments have supported home ownership in other ways. A recent report by Public First found that introducing a new equity loan scheme for first-time buyers would support the construction of an additional 100,000 new homes over the next five years.
- Address the long-term problems in the Section 106 Affordable Housing market which sees tens of thousands of new homes designated for Social and Affordable Rents going unacquired by Housing Associations. Improving flexibility in Section 106 agreements to clear the backlog and get builders investing again is long overdue
- Resolve the ongoing delays and uncertainty caused by the failure of the Building Safety Regulator to meet its service requirements. Since last spring, prospective high rise developments have required approval from the new Regulator run by the Health and Safety Executive which has been unable to deal with its workload. Investment in new apartment blocks has collapsed because of the uncertainty.
- Speed up the planning process. While the planning framework changes delivered by the government in its first months have helped to create a more progressive planning system, the day-to-day operation of planning services at a local level continues to frustrate. Recent HBF research has found a shortfall of more than 2,000 planners in local authority departments and average times to agree a Section 106 agreement is regularly exceeded one year. Meanwhile, stretch councils are failing to spend infrastructure and community payments made by developers with the running total of unspent Section 106 and Community Infrastructure Levy reaching £8bn in 2024
- Recognise the impact that a suite of new taxes, levies and policy costs is having on viabilities and deliverability of new housing. Since 2020, builders have seen costs of government interventions balloon with a new industry-specific Residential Property Developers Tax, Biodiversity Net Gain, Nutrient Neutrality charges and multiple regulatory changes, including a forthcoming Future Homes Standard. Government recently confirmed the introduction next year of a new levy on house building, which will add thousands to the cost of building each new home, and last week launched a consultation on a new Build Out Tax, empowering councils to impose additional costs on builders if construction rates decline due to market slowdowns.
“This underlines the long lead time to secure residential planning consent”
Neil Jefferson, chief executive of the HBF, 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.
“Whilst 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, powered by Hubexo said: “The drop in detailed planning approvals has been widespread, but especially marked for larger projects of 125 homes or more. Whilst 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.”
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