Planning permissions for residential improvements and extensions have fallen to their lowest level in a decade, according to the latest analysis by Savills.

The report reveals that 151,177 planning consents were granted for housing renovations in England in the 12 months to the end of March, down 27% on the 10-year average and 8% year on year.

However, the data also revealed that housing transactions rose 24% over the same period. Savills said there is usually one renovation approval for every five housing transactions, but this figure fell to one in every 6.8 transactions in 2024.

Lucian Cook, head of residential research at Savills, said: “With more properties available on the market and slightly weaker demand, our agents report that buyers, who have greater choice, are increasingly favouring turn-key or ready-to-move homes.

“With 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 homes remains most popular among buyers in London and the South, but there has also been a significant fall in the number of permissions granted in this region.

In the year to the end of Q1 2025, 4,035 renovation approvals were granted in the North East, down 15.3% year on year and 29% over five years. In London and the South East, renovation approvals fell 3% and 9.3% year on year and 16.4% and 23.3% in five years respectively.

“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,” Cook said.

“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.”