Welcome back to Build, Baby, Build. Each edition we're digging into what's happening on the ground in UK planning. Here's the puzzle we set out to solve: mortgage rates have been painful, and the cost of borrowing for developers has come down in recent years but remains high, with the base rate still sitting at around 4%. In that kind of environment, you'd expect application volumes to hold steady at best - not climb. Instead, a look into our IBex data reveals applications for new residential units have climbed back to levels last seen in the near-zero interest rate environment of the pandemic. 

What our data shows

Having tracked application volumes across the planning pipeline for new residential units, quarter on quarter, using IBex, and layering in the macro context - in this case, the Bank of England base rate - we've discovered a reason to be hopeful. According to our data, in Q1 2026 new residential applications hit their highest level since 2022, effectively going beyond the increased volumes of application activity we witnessed in a 0% interest environment, even though the base rate now sits at around 4%.

So what makes this increase interesting is the timing. You’d expect a relatively high base rate that’s stayed consistent for six months to equate to a steady application stream at best: Instead, application volumes are behaving as if money were cheap. That gap - strong activity despite expensive borrowing - is the signal that something else is driving developer confidence. The strongest candidate is heightened planning reform.

The deep dive: what's behind the pipeline

Several key pillars of Labour’s planning reform stand out as the primary catalysts for this shift in activity:

• The Return of Mandatory Targets: In early 2023, the previous administration shifted local housing targets to advisory status. Labour quickly reversed this, making targets binding once more and increasing the national goal to 370,000 homes annually, a move that forces council accountability and bolsters developer certainty.

• Unlocking the Grey Belt: By reclassifying neglected Green Belt land, such as disused car parks and brownfield sites within the Green Belt, the government has created a new category of developable land that was previously off-limits.

• Financial Backing for Brownfield Sites: To prioritise urban regeneration, the government allocated £68 million to more than 50 local authorities, specifically intended to ready brownfield locations for construction.

• Accelerating Stalled Developments: The newly established New Homes Accelerator programme focuses on unblocking projects currently caught in planning red tape or left partially completed.

Comparing these policy shifts with market data reveals a distinct trend. After a spike in Q2 2022, new build applications plummeted as the Bank of England hiked interest rates in response to global inflation shocks. Applications remained suppressed while the base rate was at its peak, only beginning a modest recovery in late 2024 as rates started to soften.

What is notable, however, is the recent surge in applications despite the base rate remaining high at approximately 4%. This growth mirrors the activity seen during the pandemic’s era of near-zero interest rates, suggesting that confidence is being driven by structural policy reform rather than cheaper borrowing.

The Takeaway

Applications are a leading indicator, but they’re not a finished home. The real test is how many of these schemes convert into homes people can move into, and the government's own numbers show completions still running behind the 370,000 target this year. 

It's worth watching who's steering next. Andy Burnham, the frontrunner to succeed Keir Starmer as Prime Minister, used his first major policy speech this week to put devolution and council house building at the centre of his platform - pledging the biggest council housebuilding programme since the post-war period, delivered through a new "Number 10 North" based in Manchester. If that vision takes shape, it points to a planning system with even more local muscle behind it, and renewed political attention on getting council-led schemes moving. 

Faster planning decisions increasingly depend on the systems local authorities and developers use to process, track, and validate applications, and digital tools are moving faster in the private sector than public procurement cycles typically allow. Whoever leads next will need to treat technology adoption as seriously as policy reform if the pipeline strength we're seeing is going to convert into homes at the pace the targets demand.