Planning Applications Just Hit A 10-year High! Time To Buy Housebuilders?

Wed 8:30pm by Roland Head

9 comments 727 reads

Back in September 2025, I published an article on the UK’s listed brick producers, noting how brick deliveries had risen sharply from the lows seen in late 2023.

At the time I highlighted recently-increased volume guidance from several big housebuilders, but suggested that brick producers looked the better play to me at that time.

One reason for this was that an increase in brick shipments would provide a rapid lift to profits for brick producers as capacity utilisation rose. In contrast, housebuilders’ profits came later in the day and are more vulnerable to political and macroeconomic pressures.

My plan was always to follow up with a look at housebuilders and my attention was recently caught by the news that planning applications for new housing in England hit a 10-year high in 2025.

Is it time to take a closer look at housebuilders?

Refilling the pipeline?

It’s no secret that new housing starts have plummeted since 2023, reaching a post-pandemic low ahead of the Autumn Budget in 2024. But recent data do give me some hope that a gradual recovery might be underway.

Last year saw a sharp rise in new housing orders for construction (contracts signed to build new housing). These rose by 14% sequentially during the final quarter of last year and were also 12.6% higher than the same period one year earlier:

Data source: ONS

There are also signs the medium-term pipeline of planned housebuilding might be improving.

Planning applications for new homes in England reached a 10-year high during the final quarter of last year, according to planning services specialist TerraQuest:

Source: TerraQuest (l-r 2020 - 2025)

TerraQuest’s data shows that planning permission was sought for 335,387 new housing units in 2025, more than 50% above the level of applications seen in 2024.

There is a caveat here, of course. Planning approvals in England have fallen in each of the last four years:

Year ending	Units granted planning	Percentage change
30 Sept 2021	325,000
30 Sept 2022	290,000	-11%
30 Sept 2023	254,000	-12%
30 Sept 2024	245,000	-4%
30 Sept 2025	208,000	-15%

Source: Ministry of Housing, Communities & Local Government

Regardless of the cause of this decline – planning delays, policy uncertainty or…

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Rudy65

10:17am

Excellent article, thanks. As someone who used to work as a Land Director for two housebuilders and in the property industry for 32 years, its a sector I'm always interested in, sometimes too biased for my own good. At the moment, there isn't any reason to buy housebuilders given the headwinds, although due to my bias, I did have a small punt on Vistry this morning! Certainly a sector to watch and £ to be made in due course like in the GFC in 2009/2011

10:18am

Is Cairn Homes a better option?

yadi

10:34am

Excellent analysis of an interesting sector. The housebuilders are most cyclical. After the financial crisis the Barratt was under £1 , a few years later it was over £7.

I do hold many housebuilders listed above and I am underwater on many. I think they may fall further but we are not far from the bottom. Maybe we are at the bottom now and looking at 2-3 years ahead they are more likely to be up than down. I topped up my Vistry holding today after the 4th profit warning. Persimmon and Bellway are my choice. I put Berkeley in the luxury category and that sector currently is out of favour!

Epitychia

10:53am

Confused why they are not making huge profits, The Crest Nicholson ROE is pathetic. New houses are expensive and the quality is low. Is the high cost of building down to the difficulty in getting skilled workers due to the collapse in the apprenticeship system?

Maybe others with knowledge of the industry can answer this?

rmillaree

11:01am

I think the issue is often that if you wait till the green shoots of recovery are obvious you often find with shares the clever money has already entered and the price is well up from lows - on the flip side finding the bottom aint easy - i hoped vistry and already kitchen sinked stuff last year after their acounting issues - but clearly despite the green shoots - margins are a worry so they clearlyn have to run to stand still.

what is clear that the government need to get houses built - it reflects bad on them if they dont deliver promises - and that demands that more planning should be granted - hopefully once planning is granted the rest takes care of itself.

overall i would agree that finding portfolio of builders right now - at or around book value or less seems like the time might be right. As to which ones to buy thats tricky so perhaps selction of a few with slightly different profiles makes sense.

If one wants to be negative perhaps - its clearly becoming more expensive to build homes - and if house prices arent rising - well is it harder to make good margins if house pricies are just bumbling along - hoepfully peak toughness is right now though - ie buiolding efficiency gains and getting cost inflation under control - that seems a struggle for some and in particualr for vistry.

Archer

11:09am

This is a sector with potential for delivering significant growth to the UK and I was enthusiastic at the start of 2025. However, the lack of progress versus the governments alleged commitment, has impacted my confidence that there will be a swing. It isn't hard to get this sector going, it has been done in the past, the lack of action given the commitment is extremely weak. I think the same is true for infrastructure (rail, roads, electric network and water) and defence. Grouping these three together has caused me to loose confidence and they aren't been held accountable.

Mhar91

1:50pm

The odds are stacked against house builders for many reasons. I’ve worked on sites and also on rail for the last 15 years now. There are young people entering the industry but not enough. Most would rather go to uni as this was always seen to be the wisest decision financially ( I do think the tables are turning on this one and we will see an influx of young people slowly turning to trades again. It’s cyclical and ive seen it first hand in some professions, when the money flows back into them so do the workers) Apprenticeships aren’t paid well enough so most would rather start as labourers and operatives taking home an extra £100 per day.

Materials keep rising yoy more than house prices are. This alongside the fact everything so expensive young people are struggling to get on the housing ladder.

Stamp duty increased last year, so for a 450k house it’s roughly around 13k.

Without been too political this government has rinsed the working people and savaged them with more and more taxes.

If they ease planning constraints and offer Incentives especially for first time buyers the industry could be easily kickstarted.

I do hold Barratt Redrow (LON:BTRW) and do believe there’s a decent upside potential within the next year or 2

galois

3:26pm

Following the logic expressed in the article (unless I have misunderstood it suggests brick manufacturers front run the housebuilders), wouldn't you buy the brick manufacturers first? Then when their share prices have started to move, look at the house builders.

mikebianchi

3:37pm

Sadly and mostly down I own nearly all of them and many brick makers, I gradually added some 2-3yrs ago anticipating that interest rates would fall, then building gets going and then house prices rise. Alas a combination of Gov policy putting labour costs up and crazy energy policy pushing brick prices up has resulted in a bogged down sector. Just read the builders RNS's going back a year or two, except Cairn Irish their very positive. Patience is a virtue who ever thought SAGA and JUP would come back from the dead. Its a buy at bargain prices the moment

Planning applications just hit a 10-year high! Time to buy housebuilders?

Refilling the pipeline?

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Roland Head

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