A staggering 233,811 homes were submitted for planning permission in the final quarter of 2024. At first glance, this looks like good news—but is it enough to solve the UK’s housing crisis? According to TerraQuest, the reality is more complex. They caution that expecting all these applications to translate directly into completed homes is “unrealistic.” In fact, this number still “falls well short” of what’s needed for the government to achieve its ambitious goal of delivering 1.5 million homes during this Parliament.
The latest Planning Application Index, which tracks trends in planning applications, shows that in the past five years, an average of 300,232 new homes have been applied for annually. In theory, this would be enough to meet housing targets—but theory and reality don’t always align.
The report highlights that the general election in July 2024 did not lead to an immediate increase in planning activity. This is understandable, as identifying suitable sites and preparing outline applications is a time-consuming process. What is more worrying, however, is that planning activity towards the end of the year remained notably subdued. In December, the number of applications was among the lowest seen in the past five years, even dipping below the levels observed during the peak of the Covid-19 pandemic in 2020.
Looking ahead, the report suggests that we’ll get a clearer picture of the housing sector’s response to the new Labour government over the next two quarters of 2025. Factors such as the recent drop in the Bank of England’s base interest rate may also play a role in shaping market confidence and developer activity.
Geoff Keal, CEO of TerraQuest, highlights why this moment is so crucial: “We’re at a key turning point for the government. With changes to the National Planning Policy Framework and the introduction of the new planning and infrastructure bill, it’s more important than ever to track market sentiment and how policy shifts impact real-world development. The Planning Application Index helps us do just that, offering a real-time look at planning activity across England and insight into how developers are reacting to the latest changes.”
He adds, “The real test will come in the next three quarters of 2025, when we can see if the government’s new approach is working. Once the market has adjusted to these changes, we’ll have solid data to either support or challenge their effectiveness.”
Despite the hurdles, Keal remains cautiously optimistic: “The government has a tough road ahead, but there are reasons to be hopeful. A lower base interest rate, early signs of economic growth, and a push to accelerate building could finally get us closer to what we’ve needed for years—more homes, built faster.”
If you’re considering a new build, understanding the planning landscape is key. With fluctuating approval rates and evolving policies, being well-prepared can make all the difference. Our guide on What to Consider When Starting Your New Build Project walks you through the essential steps, from finding the right site to navigating planning regulations, helping you set off on the right foot.
Additionally, seeking expert advice before submitting a planning application can save both time and money. Our Pre-Planning Advice service helps you navigate the complexities of the planning system, ensuring a smoother approval process and a stronger foundation for your project.
At Homz, we specialise in making the planning process as smooth and stress-free as possible. Whether you need guidance on site feasibility, planning applications, or development strategy, our expert team is here to help. Get in touch with us today to discuss your project and take the first step towards bringing your vision to life.
References:
1.) https://www.theplanner.co.uk/2025/03/26/permission-sought-230000-homes-q4-2023-statistics-show
2.) https://cdn.prod.website-files.com/6684da76c7ba572bab30af89/67d998abdc9fd825ab2ba997_The%20Planning%20Application%20Index%20Q4.pdf
