Local councils granted 8,100 residential applications in the final three months of last year, down 8% from the same quarter a year ago, official data shows.
Over the whole of last year councils approved 32,500 residential applications, down 9% on 2022, according to the Department for Levelling Up, Housing and Communities.
The department adds that in the final quarter of last year 90% of major applications – covering commercial and residential projects — were decided within 13 weeks, or the agreed time, up 3% from the same quarter a year ago.
But just 20% of major applications were decided within the statutory period of 13 weeks, up 2% from the same period a year earlier.
The competition watchdog called the UK’s planning system “complex and unpredictable”.
It added: “The planning systems in England, Scotland and Wales are producing unpredictable results and often take a protracted amount of time for builders to navigate before construction can start.
“Many planning departments are under resourced, some do not have up-to-date local plans, and don’t have clear targets or strong incentives to deliver the numbers of homes needed in their area.”
The watchdog’s report followed housing secretary Michael Gove pressing the regulator to open a probe into the housing sector in December 2022, after the government was forced to back down from its target to build 300,000 homes a year, which was changed from mandatory to advisory, following threats of a rebellion from its own MPs.
Last year, the UK added 234,400 dwellings, unchanged compared to the previous 12 months, according to DLUHC data in November.
This is below the 2019 Conservative manifesto target of adding 300,000 homes a year by the mid-2020s.
Labour leader Keir Starmer has promised to build 1.5 million homes over five years if the party is returned to government, through a combination of looser planning rules and green belt construction.
