The development land market is telling two very different stories depending on where you operate. While 61 local authorities now face presumption in favour of development—the biggest shift in planning policy for years—the reality on the ground varies dramatically by region.
Planning approval rates range from 82% in London to 92% in the North East. Infrastructure constraints are blocking thousands of homes in unexpected places. And new government support measures worth £700 million are creating genuine opportunities for developers who understand how to access them.
For SME developers, this isn't academic analysis—it's intelligence that should shape your acquisition strategy for the remainder of 2025.
Planning approvals: the regional divide
Planning approval rates measure how many applications are granted versus refused by local authorities—essentially your odds of getting permission. National statistics reached 87% approval rates in Q1 2025, meaning roughly 9 in 10 applications succeed. But averages hide the reality: the gap between best and worst performing regions is now 10 percentage points—and growing.
Northern England consistently outperforms. The North East delivers 92% approval rates with just 6% variation between authorities, making it the most reliable region for planning success. Compare that to London's 82% rates, where West London boroughs manage only 76%.
The presumption penalty is real—and significant for developers. Those 61 councils that failed to deliver 75% of their housing requirement now face "presumption in favour of development," essentially meaning they must approve housing applications unless they can prove the damage clearly outweighs the benefits. Portsmouth managed just 26% delivery, Eastbourne 28%—these authorities must grant permission unless adverse impacts "significantly and demonstrably outweigh the benefits."
For small schemes, the stakes are higher. Only 24% of applications for 2-50 units succeed at appeal, compared to 43% for larger developments. Getting it right first time isn't just preferable—it's critical for smaller developers who can't afford multiple appeal processes.
Processing times remain problematic. While 90% of major applications are decided within the statutory 13 weeks, the average is actually 117 days (nearly 17 weeks) from submission to decision. Two authorities—Lewes District Council and Bristol City Council—are formally designated by the government for poor performance, meaning developers can bypass them entirely and submit major applications directly to the Planning Inspectorate instead.
Infrastructure: the constraint you can't ignore
Infrastructure capacity has moved from background concern to project-killer. Grid connection shortages are affecting developments across the country, while capacity constraints create regional bottlenecks for multiple utilities.
Electricity grid constraints are the most visible problem. West London made headlines in 2022 when the Greater London Authority warned developers that new housing projects in Hillingdon, Ealing, and Hounslow could face delays until 2035 due to data centre power demands along the M4 corridor. While the GLA later clarified there was no outright "ban," the underlying capacity constraints are real—and have since been partially addressed through network collaboration that brought forward connection dates for 7,800 homes.
The broader grid issues persist nationally. The massive backlog of projects waiting for electricity connections means some developments are being given connection dates in the late 2030s, creating genuine delays across the country.
Water infrastructure creates regional bottlenecks despite £104 billion in approved investment for 2025-2030. Supply-demand deficits affect 14 water resource zones, with Thames Water area developments facing particular delays for new connections.
School capacity affects 71 local authority areas, with 36,000 primary places and 37,000 secondary places still needed by 2028/29. Eighteen percent of state-funded schools are at or over capacity, creating planning barriers in areas with insufficient educational infrastructure.
The takeaway: Infrastructure constraints must drive site selection from day one. This is particularly critical for developers in high-constraint areas, where utility pre-application enquiries could save months of wasted effort.
Government support: real money, if you know how to access it
The policy shift toward supporting SME developers represents a genuine change, not just political rhetoric. The £700 million extension to the Home Building Fund demonstrates government commitment with actual resources behind it.
The numbers matter:
- £100 million in SME Accelerator Loans as part of the fund extension
- Support for delivery of around 12,000 additional homes
- Streamlined planning for developments under 10 units
- New 'medium site' category (10-49 homes) with simplified rules and proposed Building Safety Levy exemptions
The December 2024 NPPF changes introduced 'Grey Belt' development opportunities, making previously difficult Green Belt sites significantly more accessible. Combined with mandatory housing targets of 1.5 million homes over five years, the policy framework now actively supports rather than hinders development.
How to optimise within your region
Understanding regional performance differences matters less for relocating your business and more for refining your approach within existing territories.
If you operate in Northern England: You're in the strongest position. Focus on maximising deal flow since approval rates are consistently high. The 92% North East rates mean you can be more aggressive on site selection without proportionally higher planning risk.
If you operate in the Midlands: You have solid fundamentals with minimal Green Belt constraints. Target sites under 10 units to leverage streamlined planning, and build relationships with the 29 councils delivering between 75-85% of housing targets who need successful developers.
If you operate in the South/London: Your strategy must be more selective. Target the 61 presumption authorities where approval is significantly easier, and focus heavily on Grey Belt opportunities. Infrastructure pre-application enquiries become absolutely critical—don't exchange contracts without utility capacity confirmation.
If you operate across multiple regions: Weight your pipeline toward northern opportunities while maintaining presence in southern markets through presumption authorities and Grey Belt sites.
Land transaction market: stabilising but selective
While Q3 transaction data isn't complete, current trends suggest volumes remain 15-20% below historical averages but are stabilising. Greenfield land values increased 1.3% annually through Q1 2025, while urban land values declined 1.9%.
Regional pricing variations are substantial. Northern England shows the strongest fundamentals with greenfield land value growth, while the South East faces headwinds. The general pattern shows northern sites achieving significantly lower per-acre prices than southern equivalents, reflecting both lower house prices and different market dynamics.
Transaction characteristics have evolved. Deals take longer to complete, with more complex payment terms becoming standard. Deferred payment structures are increasingly common, allowing developers to manage cash flow while land values stabilise.
Major housebuilders are returning to the land market, creating increased competition for strategic sites. However, SME developers benefit from greater flexibility in site selection and faster decision-making processes, allowing them to move more quickly on opportunities.
Your action plan for Q4 2025
Start with your local presumption authorities. Even in challenging regions, these 61 councils must grant permission unless adverse impacts significantly outweigh benefits. This represents the easiest planning approvals available.
Leverage government support measures now. The £700 million Home Building Fund extension is actively lending. Early applications face less competition than when the market fully awakens to these opportunities.
Factor infrastructure constraints into every decision. Conduct utility pre-application enquiries before exchanging contracts. Consider alternative solutions like on-site renewable energy for constrained areas, and build infrastructure costs into initial appraisals.
Build strategic partnerships ahead of increased investment. Government social housing investment is increasing, and housing associations need delivery partners. Establish relationships with councils in high-performing areas where your success rate will be highest.
The bottom line
Q3 2025 presents a rare alignment of supportive policy, available funding, and clear regional opportunities. But success requires understanding how to operate within your regional context rather than trying to fight it.
The window for early movers is limited. As larger developers recognise these opportunities and infrastructure constraints worsen in problem areas, current advantages will diminish.
Developers who understand their regional dynamics and adapt their strategies accordingly will find significant opportunities in a market that's fundamentally reshaping. The key is working with your regional realities, not against them.
Next week: Infrastructure constraints by region—which utilities to check and how to navigate capacity challenges before they derail your project.