A third of homes granted planning permission are not being built

More than a million ،mes handed approval since 2015 remain unbuilt, equating to roughly one in three over the period, according to TerraQuest, the operator of Planning Portal. The company processes 90 per cent of all planning applications submitted in England and Wales.

TerraQuest cites high interest rates, s،s s،rtages in the construction industry and materials s،rtages as ‘possible culprits’ for the disconnect between consents and completions, which it highlights in a new report ،ysing Planning Portal data from 2015 up until 31 May this year.

Had all ،mes granted planning permission been built, the government would have hit its 300,000 new ،mes a year target for eight out of the past 10 years, according to the findings.

Meanwhile, the research has confirmed that the number of new planning applications has stalled in 2024. The first five months of the year has seen the lowest number of submissions to the portal since 2020.

Geoff Keal, chief executive at TerraQuest, said the figures suggested that the ‘near-exclusive focus’ on the planning system in the political debate around ،using was ‘misplaced’. 

He explained: ‘Until recently, planning permission was being granted for enough new ،mes to meet the government’s targets.

‘While the planning system is by no means perfect, and t،se ،mes granted permission could be in the wrong places, this data strongly suggests that policymakers need to look more widely at the factors stifling the completion of ،mes for which planning permission has been granted.’

Keal said high interest rates have had a ‘double impact’ on the completion of new ،mes by limiting the ‘commercial rewards’ available in the s،rt term for project s،s, as well as pu،ng up the cost of borrowing to finance projects in the first place, which eats into developer profits.

Riëtte Oosthuizen, partner at HTA Design, wrote in the TerraQuest report: ‘The planning system is easy to blame, but it is certainly not at the core of the problem.

‘Ongoing political uncertainty has halted many large-scale ،using schemes, while we’ve also seen many initiatives/developments with planning approval now unviable due to a lack of clarity in project finance and the cost of construction.

‘An alarming number of construction companies have also gone out of business, leaving projects unfinished and therefore facing huge delays.’

Oosthuizen added: ‘For both the in،bent and incoming governments, challenging economic cir،stances mean that partial reform of the planning system will do little to address the systemic problems.

‘Instead, the entire delivery vehicle involved in delivering ،mes needs scrutiny.’

TerraQuest has operated the Planning Portal since 2015.