Planning reform has boosted new homes applications: the UK's housing challenge is now about delivery
Planning reform has boosted new homes applications: the UK's housing challenge is now about delivery.
As the national planning application service processing around 95% of planning applications in England, Planning Portal has a uniquely granular view of market intent. In 2025, every region outside London recorded the highest number of new homes applied for this decade, by significant margins. Recent NPPF reforms appear to have driven this surge.
TerraQuest's latest report looks beyond the headline figures to examine what this means for developers and housebuilders. Planning reform has unlocked intent. The harder question is whether the industry can convert that intent into completed homes.
The key issue now is identifying viable sites and progressing them through an increasingly complex and constrained development environment.
The planning process continues to present obstacles. Schemes recommended for approval are often reported to be refused by planning committees, only to be approved at appeal. This has made appeals an expected part of the development process, adding delays, costs, and uncertainty. Even after permission is granted, developers face growing viability pressures caused by rising construction costs and weakening sales values.
Affordability remains central to the problem. If buyers cannot afford new homes, developments become harder to deliver profitably. This challenge is particularly severe for apartment schemes and projects with substantial affordable housing requirements. Smaller developers, who lack the financial resilience of major housebuilders, are especially vulnerable to planning delays and rising costs. Despite being vital to the industry, SME housebuilders currently account for only around 9% of housing delivery, highlighting a significant imbalance in the market.
Small-site development is increasingly viewed as a major opportunity to increase housing supply. Although these sites can be difficult and resource-intensive to develop, innovative approaches such as small-site aggregators and accelerators are helping overcome barriers by combining multiple sites into larger, more efficient development programmes. Technology and data analysis are also improving site identification, risk assessment, and viability planning.
Modern Methods of Construction (MMC) can contribute to faster and more sustainable delivery, but they are not a standalone solution. Challenges around insurance, regulation, utilities, and upfront costs continue to limit wider adoption. At the same time, retrofit and adaptive reuse projects, including the conversion of vacant commercial buildings, remain important sources of future housing supply.
The UK's housing challenge is no longer primarily about planning policy or land availability. It is about delivery. Achieving housing targets will require stronger collaboration between developers, local authorities, planners, funders, and technology providers, alongside earlier viability assessments, and greater support for SME builders. The focus must now be on creating a more integrated housing system capable of turning policy momentum into completed homes more efficiently and reliably.
Read the full report.
