Coming up short
New home delivery in England continues to fall well below the Government’s ambitions. Energy Performance Certificates (EPCs) show just 204,500 new homes were completed in the year to Q1 2026. This is against a national need of c.370,500 homes per year based on the most recent stock and affordability data.
Key indicators suggest an uptick in activity in the near term is unlikely. The number of homes gaining planning consent fell to 186,000 in the year to March 2026, 45% below the 2017 peak in consents granted, which itself was insufficient to meet the Government’s target for new home delivery.
We should see a reversal in this trend emerge over the course of the year, with an increase in the volume of homes gaining consent, particularly given the rise in planning applications submitted following the introduction of the 2024 NPPF. Notwithstanding, we still have a long way to go to reach a level of housing development that could meet need or improve affordability.
While we are yet to see an improvement in consents granted, the impact of the 2024 NPPF is beginning to be felt elsewhere in the planning system. The reintroduction of mandatory targets at a local authority level and the revised Standard Methodology are now impacting land supply positions and the likely future results of the Housing Delivery Test. This will trigger the presumption in favour of sustainable development in an increasing number of locations.
With councils now expected to progress plans under the new, faster plan-making system, these higher mandatory targets should become adopted in local policy over the next three years in most places, with a small selection of areas using older policy and needs figures under transitional arrangements for plan making. In general, the current planning environment has created a positive opportunity for developers, and the higher housing targets introduced will need to be met through additional local plan allocations, new planning applications, or both.
Some of these emerging plans contain housing targets that are lower than the new Standard Method, so the window of opportunity that has been created for residential applications through having the presumption in favour in play will close in places for a period. There will still be opportunities to progress sites, as the 70% of local authorities without an up-to-date plan will seek to allocate land in new emerging plans or plan reviews. Our projections for how local authorities will do this, and the implications for developer strategies, are explored in more detail in our second article in this series..
Erosion in land supply
With housing targets increasing under the 2024 Standard Method, and levels of up-to-date local plan coverage taking time to improve, many local authorities have seen an immediate negative impact on their housing land supply position. Local authorities across England have an average housing land supply of 4.4 years as a result of the increased housing targets set by the 2024 NPPF. This is far below the 6.4 years of supply recorded in 2024.
The 2024 NPPF takes into account affordability in the assessment of housing targets, so the impact of the new Standard Method has been most pronounced in less affordable markets. For example, the average land supply in the South East, a less affordable market, has fallen to 3.3 years. However, in the North East, which is much more affordable, the uplift in housing requirement has been lower, and housing land supply is at a relatively healthier average level of 4.8 years.
As a result of these shifts in land supply positions, a higher volume of planning appeals has been allowed over the past year, as explored in our second article. In total, 61 local authorities (21%) have had a lack of five-year land supply confirmed at appeal over the past year. Among those 61 local authorities, 22 were found to have less than three years’ supply.
We use the most recently published position from each local authority as a starting point. We then compare the published supply figure with either the adopted requirement or standard method depending on status of the adopted plan. We adjust the buffer based on how each local authority has performed against the housing delivery test.
In each instance, we are not reviewing the deliverability of sites within the local authority’s published position. As a result, outputs from this map may differ from other advice provided by Savills.
Missing the target for employment land
While the introduction of firmer housing targets is gradually transforming housing land positions across England, there has been no similar approach for employment land requirements.
The 2024 NPPF states that strategic policies within local plans should make “sufficient provision for […]employment[…] and other commercial development”, but does not define how sufficient provision should be calculated. As a result, for more than a decade, assessments of employment land needs for Local Plan preparation have been dominated by historic trend-based approaches – past take-up, labour demand forecasts and labour supply modelling. These methods are inherently backward looking, and much like the 2017 iteration of the Standard Method for calculating housing need, risk underestimating future requirements in areas where previous delivery, and therefore take-up, has been constrained.
In part due to this lack of clear assessment of need, there has been significant under delivery of employment space in England over the last 15 years. Savills assessment of the Industrial and Logistics sector alone suggests that there has been a shortfall in delivery of 15.6 million sqm of employment space, resulting in lower GVA growth and lost employment potential.
The draft 2025 NPPF marks an important step forward from this position. For the first time, under draft Policy E2, there is explicit reference to the need to consider market signals in planning for employment land and floorspace. Although not setting specific targets as has been done for residential development, by acknowledging the role of market signals, the draft NPPF opens the door to a more responsive, growth-orientated planning system, creating more opportunities in the long term for those seeking to bring forward employment led development.
Clearing the hurdle
The reinstated housing need targets are also now impacting the results of the Housing Delivery Test.
The most recent published results are still based on performance in the three years to March 2023, published in December 2024. We have modelled the results of the most recent year, which should be applied from November 2026. Based on our projections, 166 local authorities in England (55%) would pass the HDT in 2026, building enough homes to meet need and avoiding any sanctions linked to undersupply. The figures represent a fall from last year, when 65% of local authorities passed the test. The deterioration in results reflects the more challenging housing target hurdles introduced by the 2024 NPPF.
A further 91 local authorities (30%) are projected to have delivered less than 75% of their requirements and would therefore face the prospect of applying the presumption in favour of sustainable development in order to make up the shortfall, with weight given to housing need, including outside settlements where compliant with policies in the 2024 NPPF.
Pathways to Plan Production
The impact of higher housing targets has been felt strongly across England as a result of the low number of up-to-date local plans in place at the end of the transitional period in March 2025. Many local authorities moved quickly to submit plans in advance of the 12 March deadline, to lock in transitional protections under the NPPF. As the deadline passed, there were only 87 up-to-date plans in place across England, covering under a third of local authorities.
Twelve months on, the number of up-to-date adopted plans has risen slightly to 90, or 30% of all English local authorities. The rate of plan production is up on last year, with 12 local authorities adopting local plans in the first quarter of 2026, reflecting the flurry of activity in 2025. The fact that the resultant plans are based on the 2023 NPPF method means that the total annual housing requirement across all adopted plans is currently 225,369, approximately 39% below the volume of homes needed to meet the targets prescribed by the 2024 Standard Method calculation.
There are 51 local authorities currently at Examination, of which 41% were submitted in the last 12 months. A further ten local planning authorities have published emerging local plans and, based on recent average timescales, will likely progress to Examination within five months of publication. As a result, we expect the rate of Local Plan adoption will increase over the next year. Underpinning this are 38 local authorities that are still to produce a Local Plan post the original introduction of the NPPF in 2012. The time taken for these areas to prepare plans is well below the 30 month target timeframe for plan production set out in the 2024 NPPF.
Under transitional arrangements of the 2024 NPPF, Local Plans are now progressing to adoption under different routes, with the pathways chosen impacting the policy and housing need applied to each area. We explore the courses that each LPA will take, and various deadlines at play, in the second article within this research collection.
To read more of our research, please visit our Housing, Development and Research hub
Read the articles within Spotlight on Planning 2026 below
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