It’s not so much restrictive rules, as it is a planning system that prioritises local concerns, regardless of how minor, or incorrect, over any kind of national priority.
Our planning system is literally designed to maximally empower NIMBYism. There are no well defined planning rules, or zoning, or planning process. Every council develops their own planning policy, and broadly has the power to block any project. The result is building anything requires millions of pounds, and years of effort, to work through a councils arbitrary, and ever changing planning rules, with no guarantee of any kind of success.
Most of the rest of the world operates some kind of permitted development zoning policy, where planning policy tends to provide clear rules around what can always be built in a specific area. So it possible to start a development process knowing that certain aspects of your project must be approved, as long as you follow the rules. Unlike the UK where you project might be approved if you managed to somehow follow all the undocumented, arbitrary, and changing local rules.
Consequences are quite simple, only projects that are absolutely guaranteed to return large profits if successful are built. And for those projects there’s very little incentive for high quality building, because there’s no competition in the area, and costs of getting permission are so high, that a developers unique selling point is their ability to get permission, not their ability to actually build well.
With regards to Grenfell, that’s the consequence of have shambolic building regulations (I.e. regulations on the quantity and safety of buildings), and a construction industry that can only make money by cutting corners, because the supply of actual work is so low.