Planning approvals for new homes collapse to new low
New figures published by the Home Builders Federation (HBF) show the number of new homes receiving planning permission has fallen by 21% in the last quarter, providing compelling evidence to support government’s decision to introduce a new equity loan scheme to support first-time buyers and boost housing supply.
The latest Housing Pipeline report, based on Glenigan data, shows just 45,315 new homes received planning permission in England in Q2 2026, the lowest quarterly total since 2012. In the year to Q2 2026, permissions were granted for 214,515 homes, the lowest annual total since 2013, down 8% on the previous year and 36% below the 2017 peak.
The annual total represents just 58% of the 370,000 homes a year identified in government’s National Planning Policy Framework as the level of permissions needed to support its target of delivering 300,000 net additional homes a year.
The continued deterioration of housing supply reflects weak effective demand, constrained access to affordable mortgage lending and subdued market conditions, which limit confidence and reduce home builders’ ability to invest in new sites. At the same time, rising construction costs, taxes, levies and policy requirements are putting further pressure on development viability.
The report shows the decline in planning permissions is particularly pronounced for larger developments, as approvals for homes on sites with over 10 units in the months of April to June fell 21% from the previous quarter to 39,689 and 14% below Q2 2025. Approvals for private homes fell by 19% quarter-on-quarter and 15% year-on-year.
There were also just 1,234 projects of three or more homes approved in Q2, the lowest quarterly figure on record and 12% below Q1. The 12-month total of 5,783 was also the lowest annual figure on record. Overall, 11,764 projects were approved in the year to Q2, with very small sites of one or two homes accounting for around half of all projects.
The government’s announcement over the weekend has been broadly welcomed by industry as a potential solution to one of the major barriers to increasing housing supply. However, until full details are confirmed, the focus must be on ensuring the scheme is both attractive to as many first-time buyers and accessible to house builders of all sizes if it is to deliver a much-needed market stimulus.
Alongside calls for support for buyers, HBF has been pressing for a moratorium on further policy costs, taxes and levies on home building while an urgent cross-government review assesses their cumulative impact on development viability and housing supply.
The increasing number of taxes and policy costs layered on to development over recent years have made a growing number of sites economically unviable, with future cost burdens set to add to this pressure. HBF estimates that the cost of delivering a new house has increased on average by £76k since 2020, with even higher costs for new apartments.
The Building Safety Levy is due to come into effect next month, will add an estimated £2,320 to the cost of delivering a typical new home since 2020. This is already having an impact as HBF’s recent survey found that 36% of small and medium house builders are already delaying, redesigning or cancelling schemes in anticipation of the levy.
Neil Jefferson, chief executive at the Home Builders Federation, says: “These figures show a housing pipeline being squeezed to historically low levels, with too few planning permissions coming forward to meet the country’s housing needs. The cumulative impact of higher taxes, increasing costs and layers of new policy requirements is making more and more sites unviable, while weak demand has been compounded by the absence of meaningful government support for first-time buyers and a lack of affordable mortgage lending. The Prime Minister’s announcement of a first-time buyer support scheme is a hugely welcome step, and we look forward to working with government to ensure the scheme is accessible to as many potential purchasers and home builders as possible.”