Assumption check: British Housebuilders have the Planning Permissions. It’s Short of Buyers.
The housing ministry’s figures for 24 September, Vistry’s first-half loss and restructuring, and the talk of stamp duty before the Budget make for interesting reading.
In this article, we examine the assumption that planning is slowing down British housebuilding.
The assumption
If you ask anyone in the building industry why Britain builds so few homes, the first answer will be planning. Local councils act too slowly, and it takes years to obtain consent. Once the system improves, builders will be able to build.
Government ministers state this point, and the boards repeat it. This month David Thomas, head of Barratt Redrow, told his investors that the industry “still remains constrained by an under-resourced and unresponsive planning system”.
The importance of the line extends well beyond housing. It determines whether the state supports planning staff or buyers, and it influences how builders purchase land and how brick makers plan their kilns. If the line is incorrect, then money will go to the wrong part of the process.
On 24 September, the housing ministry provided a clean test showing that 35,910 homes had been started in England between April and June, a 20 per cent increase over the same period the previous year. During the year up to June, local councils approved 212,000 homes, a 12 per cent decrease. New home starts rose while permissions fell. If planning were determining the pace, then both figures would have moved in the same direction.
The release includes a warning. Some of the increase can be traced to a new figure from the Building Safety Regulator, which shows 5,758 starts; remove that figure, and starts would have risen by at most a few per cent. NHBC, the warranty organisation that has most new homes signed up when work starts, recorded 29,162 homes, a 4% decrease. NHBC’s data is cleaner. Nevertheless, starts did not decline in line with permissions.
What the evidence says
We selected seven listed builders and three suppliers. Each of them provided a half-yearly or full-year report ending between April and July 2026. I compared each period with the corresponding period the previous year.
The builders should consider three measures.
- An outlet is a website that has houses for sale.
- The sales rate refers to the number of houses sold to private buyers each week per outlet, excluding bulk deals.
- A bulk deal refers to several houses sold at once to a landlord or a fund.
Completions are residences which have been finished and handed over.
If the aim had been to reach a limit, builders with more outlets would have sold more and completed more projects. The data does not indicate this.
Across the seven, the median change in outlets was -3.3 %. The range ran from minus 7% to plus 6.3%, with a standard deviation of 5 points. Three builders added outlets. Four had fewer.
The median change in the sales rate was-3.8%. The range ran from minus 9.4% to plus 22.5%, with a standard deviation of 10.8 points. Vistry is the outlier. Its open market rate rose from 0.40 to 0.49 on the back of “increased discounting actions”. Leave Vistry out, and the median falls to minus 4.8%, with a spread of 5 points—four of the other six sold fewer homes per site.
Completions increased
Completions increased by a median of 5 per cent; the range was from minus 21 per cent to plus 12.7 per cent and the standard deviation was 12.4 points. Four builders completed more houses, and three completed fewer.
Set the columns out now. Taylor Wimpey added the most sites, increasing them by 6 per cent to 219. It sold 6.8 per cent fewer homes per site and completed 3.5 per cent fewer homes. Bellway operated 3.3 per cent fewer sites but managed 10.8 per cent more homes. Of the three builders who added sites, two built fewer homes. Of the four who reduced sites, three built more.
The summer made this clearer: four builders provided sales figures for the most recent weeks compared with the corresponding weeks of the previous year, and all of them saw a decrease. The median decline was 12.7 per cent, and Crest sold 0.35 homes per site each week as compared with 0.55 a year earlier.
The suppliers all give the same account: brick deliveries in the UK over the five months ending in May decreased by 8 per cent, with Ibstock producing 20 million fewer bricks, while Forterra and Travis Perkins also sold less in volume, as the table indicates.
The data
| Firm | Period | Outlets | Private sales per outlet per week | Homes finished or volume |
| Barratt Redrow | Year to Jun | 405, down 4.3% | 0.56, up 1.8% | 17,667, up 5.0% |
| Persimmon | Half to Jun | 273, up 0.4% | 0.64, up 3% | 5,189, up 13% |
| Taylor Wimpey | Half to Jun | 219, up 6% | 0.68, down 6.8% | 4,723, down 3.5% |
| Vistry | Half to Jun | 173, down 7% | 0.49, up 22.5% | 6,304, down 8% |
| Bellway | Year to Jul | 238, down 3.3% | 0.49, down 5.8% | 9,695, up 10.8% |
| Crest Nicholson | Half to Apr | 41, up 2.5% | 0.48, down 9.4% | 584, down 21% |
| MJ Gleeson | Year to Jun | 53, down 7% | 0.51, down 4% | 1,968, up 9.8% |
| Ibstock | Half to Jun | NA | NA | clay brick sales down about 7% |
| Forterra | Half to Jun | NA | NA | block and floor sales down 10% to 25% |
| Travis Perkins | Half to Jun | NA | NA | merchant volume down 3.9% |
What is actually happening
A permission lets a builder build. It does not make anyone buy.
They currently own a large amount of land on which they can build. Barratt Redrow has 54,430 plots with full consent, equivalent to three years’ worth of its present output. Jennie Daly, head of Taylor Wimpey, stated that the company owns “all the land needed to complete 2027 homes, over 97% of which have detailed planning permission”. Persimmon obtained full consent for 6,123 plots in six months, more than the 5,189 houses it has completed. Dean Finch, its chief, said that “detailed planning permissions have regularly exceeded completions over the last three years”. The ministry puts it: “many permissions do not result in a home being delivered”.
Then what determines the speed of construction? It is the sale. A builder carries out site development in phases and begins the next phase only when the previous one has been sold. If you build faster than you sell, cash gets tied up in unsold houses. Vistry is currently “tightly controlling the number of site starts and the rate at which private units are built on certain sites better to match our WIP investment with our sales rates”. WIP, or work in progress, is the money tied up in houses that have not yet been sold.
This year
This year, buyers have become more cautious. Bellway noted, “a moderation in customer demand since April as a result of the rise in mortgage rates”. On 17 September the Bank of England kept its rate at 3.75% and three of its nine members supported a rise. Berkeley stated that buyers “who do not have an immediate requirement to move and who have readily available liquidity are still behaving more cautiously when it comes to making commitments”. The company is reducing its output by around a quarter over the four years.
So who bought the houses that had actually been completed? Landlords and various funds bought them in large quantities. Bellway achieved its own target, ‘mainly as a result of a strong conversion from our bulk sales pipeline’. Gleeson sold 0.77 houses per site each week when bulk deals were involved and 0.51 when they weren’t.
That buyer is keen to get the best deal. Graham Prothero, head of Gleeson, said, “The bulk market is active, but as I have previously mentioned, pricing is very competitive”. The other major buyer is the housing association, and it is currently short of money. Vistry has sold 14% fewer homes to these types of partners. Taylor Wimpey has also warned that “limited affordable housing funding could lead to a reduction in sector output”.
The supply chain has picked up on the signal, Joe Hudson, Ibstock’s chief, stated, saying that they are continuing to match output with demand.
Where the old assumption still has teeth
Planning continues to have a negative impact, and its effect worsens over time. Barratt Redrow has reduced the number of homes in next year’s guide from 17,500 to 17,900. The company expects around 405 outlets, a figure due to ongoing planning delays and a lack of improvement on the ground in the planning system. Thomas also stated that ‘the pace of planning approvals has slowed’. Gleeson also expects fewer sites next year and ascribes this to ‘prolonged planning bottlenecks’.
The national pipeline is small. Only 1,220 private housing sites received permission in England during the first quarter. This is the lowest figure in 20 years of records. Fewer consents this year will result in fewer sites approved in the future, no matter what buyers decide.
Demand isn’t weak everywhere. Persimmon increased its rates by 3.2 per cent and sold 14 per cent more houses to first-time buyers. Gleeson, which builds low-cost houses in the North and the Midlands, told investors: “We aren’t really finding mortgage costs or rising rates to be a problem.” Buyers still come when the prices match local wages.
Three of the figures I’ve looked at are based on soft ground. Different firms set their sales rates differently and cover different months. Vistry’s rate rose because it reduced its prices. Moreover, the start figures contradict one another: the ministry records a 20% increase while NHBC reports a 4% decrease. The regulator’s new method of counting accounts for much of the discrepancy, though not all of it.
What replaces the assumption
The decision confirms it only in a more restricted form.
Planning determines how many homes Britain can build, but the number of buyers who can pay actually sets the limit, and currently buyers are the more restrictive factor.
When planning sites, builders should consider the sales rate rather than the number of consents. If a property has no buyers, the money is lost forever. They should price their homes according to the local wage, just as Persimmon and Gleeson do.
Buyers should now go ahead and make a purchase. Bellway’s spending on incentives was about 5% of the price, up from 4.1%. Landlords and funds which buy in large quantities have the greatest influence. They can set the price.
Suppliers should watch reservations rather than permissions, and brick demand is driven by buyers.
The power in the chain lies with the one who can afford to pay now—namely the rental fund, the funded housing association, and the mortgage lender. The council has less of this power than the discussion suggests. The following test will be “the Budget at the end of October”. Both Berkeley and Bellway are asking for reductions in stamp duty, the tax paid when a home is purchased.
A competitor must ask three questions: what is my private sales rate by region and by price? How many consented plots do I have for each open site? And which bulk buyers operate in my markets, and at what discount?
What would prove this wrong?
For the next two quarters, watch five measures.
- In the spring updates, the private sales rates per outlet, excluding bulk deals.
- Next is the case of outlet openings in relation to guidance, beginning with Barratt Redrow’s 405.
- Thirdly, the NHBC registrations for the third quarter.
- Fourth, monthly brick deliveries.
- Fifth, the proportion of houses sold in bulk.
Three findings would break my reading. Sales rates could hold while builders miss volume because sites are not ready. That would show planning is the limiting factor. A stamp duty cut could lift sales rates while starts stay flat two quarters later. That would show the sites were short, not the buyers. Or Taylor Wimpey’s extra outlets could turn into more homes finished in the second half, even at a lower rate per site.
We are Octopus. The Global People-Powered Competitive Intelligence Agency.
Outsmart your competition. Make the unknown known. Octopus helps you gain clarity in complex markets. With clients and tentacles around the world, we deliver sharp, actionable competitive intelligence through a blend of deep primary (HUMINT) and secondary research. If you’re looking to make smarter decisions, beat the competition, and reduce uncertainty, we’re the partner you want on your side.
Key Takeaways
- Current planning permissions do not equate to home sales; housebuilders possess more land than they can sell.
- Increased home starts contrast with fewer approvals, indicating that sales, not permissions, constrain housebuilders.
- Cautious buyer behaviour, influenced by rising mortgage rates, has led to decreased sales rates and completions among housebuilders.
- Planning delays persist and negatively affect future home building; the national pipeline for new permissions is at a 20-year low.
- To succeed, housebuilders must focus on sales rates and local market pricing rather than solely on obtaining planning permissions.
