Latest planning data casts doubt on the Government’s ability to deliver 1.5 million additional homes

Data on planning decisions out today shows that 7,000 planning applications for residential developments were granted in the second quarter of 2025, as shown in Figure 1. This is the lowest quarterly level since comparable records began in 1979. Over the past year as a whole (the 12 months to June 2025), 29,000 residential applications were granted, 9 per cent fewer than the previous year.

Figure 1: Both planning decisions and approvals for new housing developments are at record lows

It’s important to note that the number of dwellings each planning application involves can vary – granting one application for 100 units will have twice the impact on supply as granting 10 applications for five units. Figure 2 shows the number of dwellings being approved. 221,000 dwellings were approved in the year to June 2025, down by 7% on the previous year, and now at the lowest level since 2014.

Figure 2: Given the low numbers of dwellings granted approval the Government has a mountain to climb to reach its 1.5 million target

These stats may gain more attention than usual in light of the Government’s target to build 1.5 million homes by the end of this parliament (as measured by net additions, the green line in Figure 2). To reach this, the country will need to add 300,000 units each year on average over the parliament: 30% more than the 230,000 averaged in the last five years.

The number of dwellings granted planning permission is a good advance indicator of future housing supply, but it doesn’t perfectly mirror the Government’s target metric. In practice, the number of net additions is lower than the number of dwellings given planning approval (even allowing for the time it takes to build). This is because not all developments with planning permission proceed to completion, and because the number of net additions also takes into account demolitions and conversions. In practice, based on data since 2011, a net additions target of 300,000 per year implies an annual dwellings approval rate of roughly 380,000 per year. The current level is 160,000 below that.

The Government’s target is to add 1.5 million homes over the course of its five-year parliament, meaning 300,000 per year on average. It could deliver more in the second half of the parliament than the first. But every year of below-target building raises the level of building required in future years. By way of example, if net additional dwellings reached 250,000 per year in the first two years of the parliament (and this currently looks optimistic given the trend in planning applications), that would then mean net additions would have to rise to more than 330,000 per year in the final three years of the parliament to hit 1.5 million in total.

The ongoing fall in the number of dwellings given planning permission casts doubt on the Government’s ability to deliver 1.5 million new homes this parliament. The money allocated to the Affordable Homes Programme in the last Spending Review is welcome as this aims to add 300,000 to the stock of affordable homes over ten years. But homes built through this programme represent a small fraction of those that will be delivered in the next five years. Today’s data suggests the Government will need to push harder on its planning reforms if it’s to hit its target.