Planning permissions for renovations drop to lowest level in a decade – London Wallet

Planning consents for home improvement and extensions have fallen to their lowest level in a decade, according to new analysis by Savills.

The number of planning consents for householder developments in England totalled 151,177 in the 12 months to March 2025, finds Savills. This is 27% below the preceding 10-year average, and -8% down on the year.

This comes despite housing transactions increasing by +24% over the same period (Q1 2025 vs Q1 2024). Historically, there tends to be one approval for every five residential housing transactions, but this fell to one approval for every 6.8 transactions in 2024.

Graph 1: Consented home improvements v house purchase purchases (England)

Source: Savills using MHCLG, Land Reg and HMRC

“Typically, there is a strong correlation between property transactions and home improvements, as homeowners often undertake renovations shortly after moving in. However, this relationship became notably disjointed in 2023, with the gap between transactions and improvements reaching its widest point over the past 12 months,” said Lucian Cook, head of residential research at Savills.

“With more properties available on the market and slightly weaker demand, our agents are reporting that buyers, who have greater choice, are increasingly favouring turn-key or ready-to-move homes. Additionally, with ongoing uncertainty around the UK’s economic outlook, sentiment remains cautious. As a result, many buyers are adopting a lower-risk approach and are less willing to take on the financial and logistical challenges of renovation or construction work.

Extending and improving remains to be most popular among buyers in London and the South, but these locations have also experienced a significant drop off in permissions.

Cook continued: “The higher the house prices in an area, the more extending makes financial sense, meaning that more value can also be unlocked in London and the South compared with the Midlands and the North as build costs are less likely to outstrip the value added.

“But even in these areas the viability of construction is reacting to shifting market dynamics, with higher interest rates and weaker sentiment. Rising material costs have further impacted the potential uplift across these properties, squeezing margins even in higher-value areas.”

Source: MHCLG