The Government’s new planning framework risks expanding the supply of consented land without producing a corresponding increase in housebuilding, United Trust Bank (UTB) has warned.
The revised National Planning Policy Framework introduces stronger support for development in sustainable locations, including a “default yes” for suitable schemes near well-connected stations.
However, UTB argues that planning reform addresses only one part of the housing crisis, with developers also needing confidence that completed properties can be sold at sufficient volumes and values.
Official figures support concerns about the gap between planning and delivery. Permission was granted for approximately 235,000 homes in the year to March 2025, while just 143,110 new-build completions were recorded in the year to March 2026. The figures cover different development cohorts and are not a direct conversion rate, but illustrate the scale of the delivery challenge.
COMPLETIONS CONTINUE TO FALL
The latest government housing supply data shows annual completions fell by 6%, despite starts increasing by 15% to 130,170.
Planning activity has also weakened. Councils granted 28,100 residential applications during the year to March, down 4% annually.
Adam Bovingdon (main picture), Managing Director of Real Estate Finance at United Trust Bank, says: “The real risk is that improvements in the planning environment simply result in more consented land rather than more homes being built.
“Developers need confidence that completed homes can be sold at a rate and value that justifies committing capital and taking construction risk. Without that confidence, planning permissions may be secured but development starts delayed, with sites held back until market conditions improve.”
DEMAND-SIDE SUPPORT
Mortgage approvals recovered to 58,200 in June but remained below their six-month average of 61,400, according to the Bank of England.
Bovingdon says subdued demand and the stock of completed homes already available mean the Government must address affordability alongside planning.
He adds: “A modernised Help to Buy-style scheme targeted at first-time buyers and focused on SME housebuilders and developers, together with a review of Stamp Duty, would help improve affordability, increase transaction volumes and give developers the confidence to build more homes speculatively.
“Planning reform is essential, but unless it is accompanied by measures that stimulate buyer demand, there is a risk that housing delivery will continue to fall short of Government ambitions.”
