Planning Permission in Decline: A Growing Crisis for the UK’s Housing Sector

The state of planning permission approvals in the UK has reached a critical juncture in 2024. As the country faces a well-documented housing shortage, the stark decline in planning approvals is not just a hiccup it’s a structural issue that could have long-term repercussions for the housing market and the broader economy. The latest figures reveal that approvals are down sharply, a trend that threatens the government’s housing targets and casts doubt over the future of homebuilding in the UK.

A Downward Trend in Planning Applications

Between April and June 2024, district-level planning authorities in England received 84,400 applications for planning permission, which represents a 9% drop compared to the same period in 2023 (GOV.UK). Of these, 70,200 were granted, a 7% decrease year-on-year. This declining trend in approvals is particularly concerning given the growing need for new homes across the country. 

To put it into perspective, 86% of decisions during this period were granted, but the overall volume of applications has been steadily shrinking, indicating a slowdown in new projects even being considered for approval. These statistics paint a troubling picture for a sector that the government has pledged to prioritise, particularly in the wake of significant housing shortages.

Expert Insights on the Crisis

The situation is dire, and according to Ellie Laws, a Head of Planning and Chartered Town Planner at Planning By Design. “The UK planning system is increasingly at odds with the scale of the housing challenge we face,” she explains. “We are seeing a steady erosion in the number of applications submitted and approved, which directly impacts the country’s ability to meet demand for new homes. It’s not just about a lack of applications; it’s also about a system that is becoming slower and more complex, dissuading developers from pursuing new projects. 

The extensive validation checklists that are provided by Local Planning Authorities create a wall of reporting to accompany each submission, for example the London Borough of Hounslow has in excess of 25 supporting reports that could be required to support an application. With many of these reports costing upwards of a £1000, this can stall a submission before it is even validated by the council. The costs and availability of pre-planning advice is also deterring speculative enquiries. Many councils charge several hundred pounds for advice that they readily publicise, which will not be a material planning consideration for a full submission. On occasion, the pre-planning advice can cost more than a full submission and adds another time delay to any potential consent being granted.”

Without a significant increase in planning approvals, the UK risks deepening its housing crisis. The drop in approvals contributes directly to the lack of affordable housing, pushing up prices and making homeownership increasingly unattainable for many. 

 It is widely accepted that to meet housing needs, large sites will be necessary, through urban expansion or the creation of new settlements, like “garden cities”. However, for developments of between 100 and 500 dwellings the time spent “pending consideration” with the local planning authority averages at 2.5 years. For larger schemes of 500+ units, this average time increases to 5 years under scrutiny by development management. Even single new dwellings spend an average of 7-9 months ‘in planning’. This delay has inevitable economic implications. For decades UK economic growth has been inexorably linked to the construction industry, and particularly the housing sector. 

The construction industry is the largest UK industry, employing 1.5m people and contributing almost 10% of GDP. This activity in construction is felt, across social, economic and environmental layers. Employment and training feed skills and money into local communities. The provision of new houses, particularly large developments, often go hand in hand with planning gain for example, the provision of new schools, or the improvement in local infrastructure in the shape of new roads and even public transport hubs. These boost the social context of the area. Environmentally, particularly in light of the Environment Act 2021, new development has to deliver at least a 10% improvement in habitats for wildlife than levels of Biodiversity before the development. Where there is a hiatus in securing consents this will inevitably lead to a slow in construction and all the benefits, especially in meeting housing needs and fuelling the economy, which is still growing slower than was predicted. 

The Impact on Housing Development

One of the most significant challenges this trend presents is its impact on housing schemes. According to Government’s planning applications statistical release housing projects with ten or more units, which are crucial to meeting national housing needs, accounted for 91% of the total units approved in the second quarter. Yet, at 56,488 units, these larger schemes were down 12% from the previous year. The smaller schemes, accounting for 9% of approvals, include self-build projects and the conversion of non-residential properties. These alternative projects, while important, cannot compensate for the shortfall in large-scale developments.

Even more alarming is the 43.8% decline in successful planning applications for ten or more homes during the 2023/24 financial year compared to 2016/17, which was the lowest figure in over a decade These “major” applications are very often called into the planning committee. The committee is made up of locally elected councillors who have a planning interest, but not necessarily any planning training. The councillors can choose to ignore the planning officer’s recommendations and make a decision based more on locally held feelings than policy. The statistics show that over 65% of refusals issued by the committee were allowed at appeal, compared to approximately 30% of decisions overall. The slowdown in approvals directly undermines the UK’s ability to hit its housing targets, exacerbating the shortage of affordable homes, especially in regions already struggling with high demand.

Regional Disparities in Approvals

The decline in planning approvals is not uniform across the country. Regions like the North West, Yorkshire & the Humber, the West Midlands, and Scotland saw some growth in the number of approved units during the second quarter of 2024. However, other regions, including London (down 20%) and the North East (down 36%), experienced sharp declines, further complicating the housing crisis. London’s significant drop is especially problematic, given the high demand for homes in the capital and surrounding areas (GOV.UK).

80% of those LPAs with the highest refusal rates for new planning submissions were London Boroughs and surrounding authorities, who refused at least 1 in 2 submissions. Planning decisions in the capital are subject to another layer of policy, in the shape of the London Plan. This is a capital wide policy document, that has the same weighting in decision-making as the National Planning Policy Framework, and each authorities Local Plan. This adds an additional tier of compliance

The density of housing in London – whilst being in keeping with the policy of increasing urban density and moving toward 15-minute cities – can lead to heightened emotions and greater concerns about the impact on residential amenities, such as overlooking, overbearing impact. There can also be concerns on city sites about overdevelopment, and lack of local infrastructure such as healthcare provision and schooling. 

There is also a political element. Planning policy is inherently political – 16 Housing Ministers under the Conservative government between 2010 and 2023 – always changing and is complex, in councils where there is no one political party in control, large schemes can become politically charged, and weaponised. 

The lack of appropriate housing in the capital has far-reaching repercussions. London is a magnet for employment, education and tourism on a global scale. The provision of appropriate accommodation across these sectors is vital to the offer provided within the city. Ever-increasing rental costs, reduced standards of accommodation, an overheated housing market and high house prices are the social and personal economic consequences. More widely, without sufficient and appropriate housing to accommodate the migration of workforce, intellect and learners there will be an impact on the potential for economic growth.

The Need for Planning Reform

These figures underscore the need for urgent reform in the planning system. Councils decided on 332,930 planning applications in the year ending March 2024, an 11.7% fall from the previous year, marking the lowest recorded figure in a decade. Furthermore, only 285,316 of these applications were granted, a 13% decrease from the previous year.

The drop in approvals has led many industry experts and housing advocates to call for a shift to a more rule-based planning system. Ellie agrees that reform is inevitable if the UK is to meet its housing needs. “We cannot afford to continue with a planning system that is inconsistent, overly complex, and deep-mired in uncertainty. There is still an impression that whether consent will be granted or not is down to chance. The average 30% allowable appeals seem to support that. The delays caused by local authorities, especially in high-demand areas, are unsustainable. Funders, developers and homeowners have no confidence in the system, delay and uncertainty stifles investment. Reforming the planning system is not just about increasing the number of homes, but also about creating a more transparent, predictable framework that benefits both developers and communities, and ensuring the process is proportionate to the proposal.”

Conclusion

The decline in planning approvals represents a critical challenge for the UK. With housing demand continuing to outstrip supply, the current downward trend in planning permissions will only worsen the crisis unless substantial reforms are introduced. The government faces mounting pressure to streamline the planning process, support housing developers, and address the growing regional disparities in housing approvals. Failure to act could leave the UK grappling with an even more severe housing shortage, undermining both economic stability and social cohesion in the years to come.

As Ellie and other experts have emphasised, “The time for action is now, with the Labour governments consultation on the revised NPPF, and the drawing up new Housing land supply numbers for LPAs, it makes sense to address the post-submission planning process at the same time to ensure that these reforms and targets are achievable.” With the right reforms, the UK can overcome the planning bottlenecks and deliver the homes that its people desperately need.