New figures show that housebuilding activity in England has fallen to its lowest level in more than 15 years, underlining the growing challenge facing the government in meeting its housing delivery ambitions.
During the third quarter of this year, planning permission was granted for just 42,000 new homes. This represents a 31% fall compared with the same period last year and marks the weakest quarterly total since records began more than a decade ago.
According to the latest data from the Home Builders Federation (HBF), only 1,311 housing developments were approved between June and September. This continues a worrying trend, with permissions declining for the 11th consecutive quarter.
Looking at the longer-term picture, planning approval was given for 209,781 new homes in the 12 months to September 2025. This is the lowest annual total since 2013 and sits 38% below the peak recorded in early 2022.
The number of housing sites receiving consent has also dropped sharply. Over the past year, just 7,500 projects were approved, down 12% on the year to Q2 2025 and 1,000 fewer than the previous record low set only months earlier. This figure represents just 36% of the number of sites approved in 2018, pointing to a significantly reduced pipeline of future housing delivery.
The HBF says the decline reflects weakening market conditions and a growing lack of confidence among developers that there will be sufficient demand for new homes. Rising taxes, levies, and policy-related costs have also pushed many schemes into a viability crisis, making development financially unworkable in large parts of the country.
This view is supported by recent research from Zoopla, which found that around half of England is now considered unviable for new housing development. Meanwhile, the Office for Budget Responsibility has identified a shortage of viable sites as a key risk that could further restrict housing supply.
The industry is also bracing for additional cost pressures in the years ahead. Following the recent Budget, Landfill Tax is set to double from April 2026 and increase annually thereafter. In addition, a new levy on newly built homes will be introduced in October 2026, which the HBF estimates will add around £3,000 to the cost of delivering each property.
The federation warns that the latest planning figures are particularly concerning because they relate to homes that would be built over the coming years. The total number of plots approved over the past 12 months represents just 57% of the government’s combined annual housing target of 370,000 homes, as set out in the National Planning Policy Framework.
According to the HBF, urgent government action is needed if recent planning reforms are to have any meaningful impact. A growing number of potential sites are no longer viable due to escalating taxes, levies, and policy costs imposed on developers.
At the same time, demand for new homes remains constrained. Despite the country’s ongoing housing shortage, many buyers are unable to secure affordable mortgage finance, and for the first time in over 60 years there is no government scheme in place to support homeownership.
London has been hit particularly hard. The capital saw the largest fall in units approved, with permissions down 49% on the previous quarter and 72% lower than in Q3 2024. Fewer than 34,000 units and just 910 projects were approved in the last year, marking the lowest level since the Housing Pipeline Report began tracking data.
While the industry has welcomed efforts by the government and the Mayor of London to improve the business environment for homebuilders, concerns remain. Policymakers have acknowledged that excessive tax and policy costs are harming viability, but the new homes levy due to be introduced in October 2026 is expected to hit London especially hard due to its link to local house prices.
Neil Jefferson, chief executive of the Home Builders Federation, said the figures present a troubling outlook for future housing supply. He welcomed recent planning reforms but stressed that rising taxes and additional levies continue to deter investment.
Jefferson added that ministers must now address the growing cost burden placed on developers, while also tackling the lack of affordable mortgage lending. Without action, he warned, many young people without financial support from family will remain locked out of homeownership, limiting housing delivery and deepening social inequality.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property