Home Renovation in England Loses Appeal: Lowest Planning Approvals in a Decade

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The number of approved home renovation projects in England has plummeted to the lowest level in a decade. According to Bloomberg, soaring costs and market shifts have changed buyer preferences, driving demand toward move-in-ready homes.

Planning approvals fall despite housing market growth

According to the Department for Levelling Up, Housing and Communities, 151,177 planning approvals for householder developments were issued in England in the 12 months to March 2025. These include extensions, refurbishments, and interior conversions. The figure is 27% below the 10-year average and 8% down year-on-year.

This decline comes despite a surge in housing transactions: property sales rose 24% in Q1 2025 compared to the previous year. The traditional link between home purchases and subsequent renovation—long characteristic of the UK market—has been broken.

Lucian Cook, head of residential research at Savills, explains that there’s usually a strong correlation between buying and renovating, as new homeowners customize their properties. Now, however, buyers are favoring turnkey homes that require no additional investment.

Even London sees slowdown in upgrades

For years, home renovation remained popular across the UK, especially in prime locations like London. Yet even here, approvals have dropped 16.4% over the past five years, according to Savills.

Rising construction costs are a major factor. Cook notes that thinner profit margins—due to expensive materials—are discouraging both homeowners and investors from undertaking improvement projects.

Economic uncertainty reshapes behavior

Higher interest rates have constrained borrowing and dampened buyer activity in recent years. While credit conditions are easing, housing prices remain high relative to income. As a result, buyers are increasingly reluctant to take on extra costs after purchase.

This comes amid a broader cooling of the UK housing market, exacerbated by recent tax hikes. As Reuters reports, the market slowed dramatically in April following a spike in transactions in March caused by an increase in Stamp Duty.

Signs of stabilization—but no boom ahead

According to the June report from the Royal Institution of Chartered Surveyors (RICS), buyer demand returned to positive territory (+3%) for the first time since December. Agreed sales also rose to 6%. However, the house price index remained negative (−7%), particularly in London and the Southeast.

RICS economist Tarrant Parsons says the market has entered a calmer phase, with “early signs of stabilization after a volatile period.”

Outlook for home prices in 2025 remains modest. As The Times reports, Rightmove cut its forecast from 4% to 2%. Nationwide expects annual growth of 2.1%, and Savills sees potential for just 1%.

RICS analysts suggest that, if interest rates fall further, house prices could increase 3.5–4% annually. Still, risks tied to macroeconomic uncertainty remain high.