Planning
permissions, a strong indicator of future housing supply, continue to be
granted at record high levels HBF/Glenigan’s latest Housing Pipeline report shows.
Permission for more
than 350,000 new homes were granted in the year to June, as housebuilders
continue to invest.
Housing supply
climbed to 217k in 2016/17, a 74% increase in just four years, but still well
short of the 300k new homes a year target set by Government.
The Pipelinereport shows that for the year up to June 2018, the picture was very
positive with 354,646 plots granted planning permission on 20,076 sites. This
is the first time for a decade that more than 20,000 sites have been granted
planning permission in a 12-month period.
Over the course of
the past 10 years, the average permissioned site has increased in size by 58%
from 19 units to 30. Today’s figures reflect the first fall in average site
size for annualised planning permissions for almost five years (Q4 2013).
This should assist
SME builders and better enable them to play their part in delivering increases
in supply. The last few years has seen a massive reduction in the number of SME
developers and a greater supply base is needed if the 300k target is to be achieve.
Permissions for
77,704 homes were granted in Q2 of this year. This is down by 15% on the second
quarter of 2017. While it is difficult to attribute this to any single factor,
it may have been, in part, as a result of uncertainty over the future of Help to
Buy post-March 2021, as many plots currently being permissioned will be
delivered into and beyond 2021; Uncertainty around new planning policies ahead
of the publication of the Revised National Planning Policy Framework (NPPF)
which was eventually published in July; or the Local elections which often
leads to decisions being delayed by Local Authorities.
The report
also identifies some significant regional variations. Approvals were down on
the same quarter last year in some areas including London, but in contrast,
approvals were up in Wales (25%), Yorkshire and Humber (23%), South West (11%)
against a year earlier.
The number of
applications being submitted and approved demonstrates the house building
industry’s commitment to build more homes, and the confidence it has in the new
homes market. Whilst the wider second-hand housing market has weakened, new
build sales have remained strong and with new build mortgages as a percentage
of all mortgages rising from around 6.3% in the decade to 2012 to 14.6% last
year.
The confidence in
the market, supported by Help to Buy, has enabled builders to invest in the
land, material and people needed to deliver further increases in supply – but a
decision on the future of the Help to Buy scheme, that has played a key part in
supporting new build sales, is urgently needed.
Whilst the industry
welcomes the continued high level of permissions being granted, it needs to be
recognised that it will take months or years for many of these permissions to
be processed by Local Planning Authorities to the point where builders are actually
allowed to start building. The industry continues to urge central and Local
Government to invest in the planning system and local planning departments to
enable them to deal speedily and efficiently with the volume of permissions now
being submitted.
Stewart Baseley,
executive chairman at HBF said: “We have seen a 74% increase in housing supply
in four years, and the report shows the commitment of the industry to
delivering further increases.
"The fact that
permissions are now running at over 350,000 a year shows that builders are
investing in the land, and people needed to deliver more homes. If we are to
get to 300,000 homes a year, we need to see consistently high levels of
permissions being granted, and then crucially, processed efficiently.
"We also need
to see the new planning system implemented by Local Authorities as intended and
more sites, of all sizes, coming forward. Providing certainty over the future
of the Help to Buy scheme, that has been central to the increases in output we
have seen, is also key.”
Glenigan’s Economics
Director, Allan Wilen, commented: “The residential development pipeline remains
strong, despite a second quarter dip in residential unit approvals from the
historically high levels seen over the last year. Indeed, the number of projects
securing approval was up 17% on a year ago as permission was granted for more
smaller sites.”
