HTB comments on planning application and housing start data

19 March 2026

Neil Leitch, Managing Director of Development Finance at Hampshire Trust Bank comments:

Planning aspect

“This decrease underlines the continued pressure within the planning system. Delays have become embedded in the development process, acting as a structural constraint on how quickly schemes can progress and ultimately how many homes are delivered.

Momentum is too often lost between pre-application engagement and formal determination. That gap does not just affect individual schemes, it disrupts the pipeline behind them, particularly for SME developers who are more exposed to extended timelines and the impact that has on cashflow and capital recycling.

The issue is no longer simply how long decisions take, but how many schemes remain viable by the time they receive approval. Longer programmes do not just delay delivery, they actively erode viability by increasing costs, compressing margins and reducing the flexibility developers have to absorb further cost movement once delivery begins.

At the same time, land price expectations have not always adjusted to reflect tighter viability. Where land values remain anchored to previous market conditions, fewer schemes are able to progress, and developers are forced to be more selective in how and where they deploy capital.

Planning is one of several pressures, but it remains a critical constraint on how quickly viable schemes can move forward. In a market that is becoming less forgiving, developers are taking a more disciplined approach to which projects they pursue and how risk is managed. Labour cost pressures are also feeding directly into viability, with higher national insurance contributions and renewed cost movement adding further strain to already tight margins.

In that environment, clarity on viability and early engagement becomes increasingly important in determining which schemes move forward.

Confidence remains the critical missing ingredient. The challenge is not just securing approvals, but ensuring those approvals translate into starts. Decisions delayed today will feed directly into weaker delivery in the years ahead, and without greater consistency and capacity across the planning system, output will continue to fall short of ambition.”

Housing starts aspect

“Despite this increase, it does little to change the underlying reality of a market still under sustained pressure. Developers are still operating in a more disciplined and less forgiving market, where planning delays, tighter margins and funding uncertainty continue to shape how quickly schemes move from approval to delivery.

Starts are the clearest reflection of the pressures already embedded in the system. By the time a scheme reaches site, much of the risk has already been priced in, and the delays currently being seen in planning will continue to feed through into delivery in the months ahead.

The challenges in the planning system remain a key part of that, with delays upstream continuing to limit how quickly approved schemes can move into delivery.

The key issue is not demand, but viability and timing. As programmes extend and costs move, margins come under pressure, actively eroding viability and reducing the flexibility developers have to absorb further cost movement once delivery is underway. That compression of margin does not just affect individual schemes, it limits how quickly capital can be recycled into future projects and directly constrains delivery capacity, particularly for SME developers.

That is shaping a more disciplined approach to delivery. Schemes are being progressed more selectively, assumptions are being tested more rigorously, and delivery is often phased to manage risk in a less predictable environment. Developers are also engaging with funding partners earlier in the process to ensure schemes remain robust as conditions evolve.

At the same time, the construction skills shortage continues to constrain delivery capacity. Even where schemes are viable, limited labour availability can slow progress and extend programmes further. Cost pressures remain a live issue, with labour and input costs susceptible to renewed volatility, feeding directly into delivery risk and adding further uncertainty to already tight assumptions.

Confidence remains central. Well-structured projects, built on realistic assumptions and supported by funding structures that are robust, flexible and backed by consistent capital, are still progressing. In a market like this, the value of reliable funding and direct engagement between developers and decision-makers becomes increasingly important. However, the margin for error is narrower, and delivery is likely to remain constrained in the near term.”