England housing starts surge despite approvals slump

New housing starts in England rose sharply in the second quarter of 2026. This came even as the number of homes granted planning permission continued to decline, according to figures published Thursday by the Ministry of Housing, Communities and Local Government (MHCLG). 

Builders started work on 35,910 new dwellings between April and June. That was a seasonally adjusted 6% increase on the first quarter and 20% higher than the same period last year, the department's "Housing Supply: Indicators of New Supply" release showed. Completions, however, fell to 35,800, down 3% quarter-on-quarter, though still 1% above a year earlier. 

Over the same period, permission was granted for 212,000 homes in the year to June 30. That was a 12% drop from the 242,000 approved a year earlier, according to provisional figures MHCLG compiled with contractor Glenigan. 

Planning system "under this much pressure" 

Neil Leitch, managing director of development finance at Hampshire Trust Bank, said the fall in approvals reflected chronic strain on local planning departments. "This fall in planning approvals should surprise nobody when the system responsible for processing applications is operating under this much pressure," he said.  

Leitch cited research from the Home Builders Federation (HBF). It found nine in 10 local authority planning departments are understaffed, operating on average at just 80% of the capacity they say they need. Only one in five major applications is determined within the statutory 13-week period, the research found. 

The HBF's most recent "Planning on Empty" research was based on Freedom of Information requests to 134 local authorities. It found more than half of councils were operating at 90% of staffing capacity or below. Fewer than one in five councils were at or above full strength. 

"We are asking an under-resourced planning system to deal with an increasingly complicated development environment," Leitch said. "Developers face substantial upfront costs before they have any certainty of securing consent, while planning teams themselves are having to navigate an expanding range of regulatory and policy requirements. You cannot continually add complexity at both ends of the process and expect homes to be delivered faster." 

He said the effect was felt most acutely by smaller developers. "Delays tie up capital, increase pre-development costs and reduce the flexibility available elsewhere in a scheme," Leitch said. "With development appraisals already having to absorb higher costs and additional requirements, that can be the difference between a site progressing and an otherwise deliverable scheme falling out of the pipeline." 

The government has pledged extra planning capacity, including 300 additional junior planning officers funded from the October 2024 budget. Leitch said that was "a start, but it needs to match the scale of the challenge." He added: "If we want to deliver 1.5 million homes, we need properly resourced local planning authorities, simpler processes and greater certainty around getting decisions made." 

Completions a "lagging indicator" 

On the fall in completions, Leitch said the figures reflected decisions made long before the current quarter. "Completions are a lagging indicator, reflecting decisions taken months and often years earlier," he said. "The bigger concern is whether the schemes developers are looking at today still stack up." 

Richard Pike, sales and marketing director at Phoebus Software, was more encouraged by the rise in starts. "An increase in new build starts is welcome news for a housebuilding sector that has endured a prolonged period of weak activity," Pike said. "It suggests some developers are beginning to regain confidence and commit to new projects, despite the wider economic uncertainty and continued affordability pressures facing buyers." 

Pike cautioned against reading too much into one quarter. "Housebuilders are still contending with high construction costs, expensive finance and subdued demand, while higher mortgage rates continue to limit what many buyers can afford," he said. "Planning reform, a clearer long-term housing strategy and measures that support demand would all help give the industry greater confidence to keep projects moving." 

MHCLG estimates 196,900 net additional homes were delivered in England in 2025-26. That was a 6% fall from the previous year.  

The next annual "Housing Supply: Net Additional Dwellings" release, the government's most comprehensive measure, is due in November.