Planning Approvals Hit 13-Year Low: Is this England’s Housing Crisis?

In what’s shaping up to be an uphill battle for the new Labour government, planning approvals for new homes in England have slumped to their lowest level in over a decade. New figures show that just 39,170 homes were given the green light in the first three months of 2025 — a dramatic 55% fall from the previous quarter, and 32% down compared to the same period last year.

For Prime Minister Keir Starmer, who has made building 1.5 million homes over the next five years one of his key promises, the numbers underline a major challenge ahead. At the current pace, the government risks falling far short of its target of 300,000 new homes per year.

The data, compiled for the Home Builders Federation (HBF), typically provides an early signal of where the official planning numbers are heading. And right now, that direction is unmistakably down.

“Disastrous” for the Industry and Homebuyers

“This is disastrous,” said Neil Jefferson, the HBF’s chief executive. “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.”

Jefferson pointed out that the situation is being made worse by a lack of mortgage support for first-time buyers. For the first time in decades, there is no government scheme in place to help young or lower-income families get a foot on the housing ladder. “Ministers must address the lack of affordable mortgage lending,” he added.

It’s not just the short-term dip that’s worrying. The rolling annual total of homes getting detailed planning permission fell to 225,067 in the year to March — the lowest it’s been since 2012, and well below the 335,802 recorded in early 2021.

Red Tape, Delays and a System Under Strain

Behind the falling numbers lies a complex web of problems — from planning red tape to slow-moving local authorities and under-resourced regulators.

“Applications which should take 8 to 12 weeks are taking 24 weeks, and even up to a year,” said Rachel Kelly, policy director at the British Property Federation. She pointed to severe staff shortages at the Building Safety Regulator as one of the biggest current bottlenecks.

The Royal Institution of Chartered Surveyors (RICS) echoed that view. Its CEO, Justin Young, said that local planning departments are overstretched, and utility companies are struggling to keep up. “The key ingredient for the industry is clarity,” he said. “Uncertainty is part of the reason for the application slowdown.”

In other words, developers aren’t just sitting on their hands — they’re waiting for the system to catch up.

Can Reforms Turn Things Around?

Labour has acknowledged the scale of the problem and is placing big bets on planning reforms to turn things around. Last year, the government rewrote the National Planning Policy Framework, bringing back housing targets for councils — a move intended to kickstart stalled developments.

A Planning and Infrastructure Bill, currently working its way through Parliament, aims to streamline the entire process. But many in the sector say the reforms need to come into effect faster — and be backed by real resources on the ground.

“Reforms are welcome,” said Matthew Spry, senior director at planning consultancy Lichfields, “but to move the dial on delivery, applications need to be processed quickly. The government will need to act fast.”

Jefferson of the HBF went a step further, calling on ministers to revive popular schemes like equity loans and shared equity mortgages to boost demand — especially among younger buyers priced out of the market.

He also highlighted the growing financial pressure on builders, from the Residential Property Developers Tax, to nutrient neutrality regulations, and the upcoming Future Homes Standard which will require new builds to include solar panels and meet strict energy-efficiency standards.

“We Know It’s a Stretch”

In a statement, a spokesperson for the Ministry of Housing, Communities and Local Government acknowledged that the 1.5 million home target was “stretching,” but insisted the government is taking “decisive action” to speed things up.

“We are delivering the homes and infrastructure we need through our plan for change,” the spokesperson said.

Still, with fewer homes getting approved, soaring demand and a broken planning system, time is quickly running out for the new government to show progress.

Labour may have inherited a long-standing housing crisis, but with expectations high and the clock ticking, the question remains: can it turn things around before the next election rolls around? If Britain is to fix its housing shortage, it’s going to have to build its way out.