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Policy & Activities

08 May, 2014

HBF submission to CLG Select Committee inquiry into the operation of the NPPF

Clive Betts MP
Chairman
CLG Select Committee
House of Commons 

8th May 2014

Dear Sir

THE OPERATION OF THE NATIONAL PLANNING POLICY FRAMEWORK A SUBMISSION TO THE CLG SELECT COMMITTEE ON BEHALF OF THE HOME BUILDERS FEDERATION

Planning for Housing

This is a submission on behalf of the Home Builders Federation (HBF) to the Communities and Local Government Select Committee inquiry into the operation of the National Planning Policy Framework (NPPF) in its first two years of operation. 

The HBF is the principal representative body of the housebuilding industry in England and Wales and our representations reflect the views of our membership of national and multinational plc’s, through regional developers to small, local builders. Our members account for over 80% of all new housing built in England and Wales in any one year. This response is based on discussions with our members around the country, our direct experience of emerging development plans and our monitoring of planning permissions and Section 78 appeals. We also note the research commissioned by the Committee in December 2013 and its conclusions, many of which we recognise.

General Comments

Overall we believe that it is very early in the life of the NPPF to be able to assess its longer term impact. The overarching messages of the Framework are:

  • Achieving sustainable development;
  • Promoting positive planning;
  • Supporting a development plan led system; and (as far as our specific interests are concerned)
  • Increasing housing supply.

All of these objectives are about a long term shift in attitudes and approaches towards planning and development and two years is not considered to be a particularly long timescale in this context. It is, therefore, vital that the committee is not over-influenced by short term, individual anecdotes and individual decisions since many of these are considered, by HBF, to be transitional issues on the road to fully implementing the principles of the NPPF set out above.

Therefore HBF, alongside many others, suggests that the committee recommends that some long term indicators and monitoring of the impact of the NPPF are put in place in order that future decisions on how and whether to make any changes to planning policy can be taken in the light of more meaningful and comprehensive monitoring data over a more statistically robust period of time. This would, hopefully, avoid any short term, or knee jerk reactions to individual cases, many of which have their own particular circumstances that should be considered to be “outliers” rather than showing trends.

It is also very difficult to separate out the effects of the policies in the NPPF and other major factors in the supply of housing. Obviously the effects of the global recession played a significant part in the collapse of the housing market in the UK and the fall in planning permissions coming through the planning system. The steady economic growth we are now starting to enjoy has contributed significantly to the increase in housing completions, starts and new permissions coming through the pipeline and this has coincided with the application of the NPPF over the last two years. Similarly, economic investment into the housing market through industry and government schemes such as NewBuy and Help-to-Buy has overlapped with the implementation of the NPPF and it is not possible to separate out the individual effects of these initiatives.

The understanding of the implications of the policies within the NPPF, the new approach of positive planning and the application of the presumption in favour of sustainable development is only just starting to produce the results of more development plan production, greater public engagement and an increase in housing provision and production. So much so that we believe a radical review of the NPPF would be premature and unhelpful at this stage. Change, and the threat (or promise) of change, in planning policy invariably leads to a period of procrastination and delay as people stop applying the current policies long before the adoption of any new policy requirements. Given the fragile (albeit optimistic) state of the planning system at the moment the application of the NPPF should be given more time to permeate throughout the planning engagement process in order that the promise of positive planning can be delivered. 

Sustainable Development

The NPPF goes to considerable lengths to describe the concept of sustainable development (paras 6-10). Similarly, the golden thread of the presumption in favour of sustainable development is explained at length in paragraph 14. It should not, therefore, be considered that any plan or decision made in accordance with the NPPF should result in anything less than sustainable development.

This is especially important to remember when decisions are made under the presumption in favour of sustainable development where there is no up-to-date development plan or where the local planning authority cannot demonstrate a five-year supply of housing land. This results not in random, sporadic development but in sustainable development that takes account of all of the policies in the NPPF as a whole.

There have been many decisions over the last two years made in accordance with the NPPF where the decision maker (including the Secretary of State or his Inspectors) has concluded that permission should not be granted since the proposals do not constitute “sustainable development”. The presumption is not a developer’s charter nor does it threaten the objective of sustainable development.

Delivering homes

Paragraph 47 of the NPPF is very clear in its objective to “boost significantly the supply of housing” and requiring local planning authorities to “use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area”.

This is a new policy requirement of the NPPF since, prior to its publication, local planning authorities were guided by the regional strategies (RS) as to the scale of housing provision appropriate to their area. Indeed, even prior to the regional strategies, local authorities have always had some form of strategic planning guidance for their housing provision. This is no longer the case.

This new situation has challenged a number of local planning authorities and many of them who have produced draft development plans over the last 2 years have failed to rise to this challenge, preferring instead, to continue to seek to implement the scale of housing provision set out in the now revoked regional strategies. Prior to their final revocation in early 2013 there was considerable confusion of the continued role of the RS as part of the development plan and its obvious conflict with the requirements of the NPPF. This led to much delay for the first year of the NPPF as local authorities (and others involved in the development plan process) struggled to overcome this obvious conflict in planning policy.

Now that the RS have finally been revoked some local authorities have still been reluctant to bring forward development plans that meet their objectively assessed needs for housing, particularly where previously they had been “protected” by the regional strategy and their housing needs were met elsewhere as part of a wider spatial strategy.

Thus, we continue to find ourselves in a development plan led planning system with very few local planning authorities having an up to date development plan. This situation is caused not by the policy within the NPPF but the reluctance on the part of some local planning authorities to meet their obligations for robust plans that adequately address their objectively assessed needs for development.

It is, therefore, essential that the NPPF has an inbuilt methodology for ensuring that decisions can still be made to bring development forward where the development plan is not kept up to date. This sanction is critical to the delivery of sustainable development and is an essential corollary to the development plan-led system since it ensures that, where there is no up to date plan decisions on planning applications can still be made.

Similarly, in order to ensure that land is brought forward for development (even where there is a development plan in place), the requirement for local planning authorities to maintain a five-year housing land supply is an essential part of the housing delivery agenda within the NPPF. Paragraph 49 of the NPPF is clear that all housing applications should be considered in the context of the presumption in favour of sustainable development. Similarly, it is equally clear that if a local authority cannot demonstrate a five-year supply of deliverable housing sites then their development plan policies relating to the supply of housing should not be considered up-to-date. We have found that this easily understood policy is being applied very consistently by the Planning Inspectorate in hearing Section 78 appeals and in examining emerging development plans.

The policy requirement of the NPPF is very clear indeed. We have found that any criticism of this approach (normally advocated as a threat to “localism” or local decision making”) comes from those who do not wish to meet the challenge of the NPPF of delivering development plans, housing requirements or ensuring that they keep an up-to-date 5-year housing land supply through the release of identified sites.

Many commentators believe that it is the housebuilding industry itself that “banks” land, waiting for rises in the market to make its land holdings more profitable. HBFs newly published report “Permissions to Land” (Appendix 1) dismisses this myth, concluding that much of the land thought to be “banked” is actually either work in progress or is being held up somewhere in the planning system. Land with planning permission is, of course, part of the solution to ensuring that enough land for housing is identified and brought forward for development through the planning system. Local authorities should work more closely with the industry (as suggested in the recently published National Planning Practice Guidance) to ensure that they identify deliverable land in terms of viable sites that meet market and affordable housing needs of their development plan.

 

If we are to provide the quantum of housing that we need at a rate of 200,000 or more dwellings per year the five-year supply of housing land required by the NPPF should be able to demonstrate over 800,000 dwelling plots at any one time. Local planning authorities should be able to produce site by site trajectory plans showing the assumed delivery rate year on year of all of the sites on which they are reliant upon to meet their obligation for a five-year supply of housing land. Such transparent analysis is essential to positive planning for housing consistent with the NPPF yet despite this clear requirement within the NPPF many of them cannot do so.   

Similarly, many critics of the NPPF believe that an increase in the number of Section 78 appeals and an increase in the number of such appeals being allowed is a sign of the failure of the NPPF to support local decision making. However, we see this merely as a correct “policing” of the policy requirements of the NPPF. If local authorities have an up to date local plan that meets their objectively assessed needs for housing and they can demonstrate a five-year housing land supply of deliverable sites then there is no reason for them to lose appeals. However, where they do not meet their responsibilities for housing provision, as clearly set out in the NPPF, then the NPPF is equally as clear of the sanctions that will apply.

In any event, whether making decisions locally or through the application of the policies in the NPPF the outcome will be sustainable development since that is what local plans should achieve (para 15) and it is what is achieved through the application of the policies of the NPPF (para 14).

Strategic Planning

The revocation of the regional strategies has created considerable challenges, primarily for local planning authorities who are now charged with a duty to cooperate (through the Localism Act 2011 rather than the NPPF per se). Prior to the enactment of the Localism Act 2011 the task of cross boundary planning and displacement of population growth to areas with least physical or policy constraints was undertaken at a strategic level. The policy move towards requiring local authorities to take on this task themselves has not been entirely successful. Some areas that have had a history of working together (such as the greater Manchester authorities) have continued to support a strategic planning function whereas other areas (such as the South East Home Counties) appear to have completely failed in their attempts to work beyond local authorities boundaries.

 

The requirement in the NPPF for each local authority to meet its own objectively assessed need for housing is resulting in some authorities who were previously designated as growth areas choosing not to continue to perform this function (for example, Reigate and Banstead, Ashford and Basingstoke) and some authorities with physical and policy constraints having no practical way of ever meeting their housing needs (Chichester, Brighton and Hove, Oxford, Birmingham and London).

It would, of course, be possible for local authorities to work together voluntarily and, indeed, to produce “larger than local” spatial strategies to which they all signed up (both politically and professionally) but there is very little evidence that this is currently happening or that it might happen in the very near future. Strategic planning might be possible through the joint working taking place within Local Enterprise Partnerships (LEPs) but many of these self-selected areas bear little relationship to a reasonable strategic planning area and, if given a remit of planning for housing may require substantial boundary changes.

We are aware that some authorities are using the lack of any strategic planning and their own constraints to avoid meeting the policy requirements of the NPPF through the production of a development plan or by meeting their own housing needs (St Albans and Harrogate).

This problem is exacerbated in those areas that have policy constraints consistent with the NPPF such as green belt land. At present the weight being given to green belt designated land is such that even where a local authority has no adopted or emerging development plan the presumption in favour of sustainable development places more weight on the protection of green belt designation than on the NPPF requirement to meet housing needs or maintain a five-year housing land supply.

Inevitably this approach of each authority meeting its own housing needs will result in an under provision of housing across the country as those areas that are physically unable to do so will not be compensated for by those areas with excess capacity. In essence, the sum of the locally set “parts” will not add up to the national “whole” resulting in a shortfall in housing provision, exacerbating the housing crisis.

Government could assist this situation by setting out a clear national target for housebuilding, either as an annual target or as a total across a period of 5, 10, 15 or even 20 years. This would allow monitoring of housing provision to be set in the context of housing requirements even if only at a national level.

Calculating housing requirements and five-year housing supply

We are aware that the use of a standardised methodology for the calculation of an authority’s objectively assessed housing needs and its five-year housing land supply has been suggested as one way of providing greater certainty for those involved in the planning process. However, neither the NPPF nor the associated National Planning Practice Guidance sets such prescription, merely setting out the issues that such assessments should address.

HBF believes that there is no need for a prescribed methodology for either of these issues and that the NPPF and NPPG go far enough in their indications of how to address the elements of both the objective assessment and site appraisal.

While the general principles within these assessments can be applied throughout the country the specific elements affecting the housing market in an area and other planning and non-planning indicators and influences means that an element of flexibility should be allowed in both types of assessment.

Brownfield Land

We are aware that some people believe that the application of the NPPF has led to a fall in the development of previously developed land (brownfield land) and an increase in the allocation and development of greenfield land. The lack of a stronger priority for brownfield development in the NPPF is seen, by some, as a failing of the Framework.

However, the NPPF is unequivocal that the planning system should be focussed on delivery of objectives; in this case, on housing delivery. It is up to local planning authorities to ensure that sites identified through the development plan process are deliverable and that they will produce houses to meet objectively assessed housing needs for their area. There is nothing in the NPPF to stop local authorities from bringing forward previously developed land for future housing supply. However, just as some greenfield sites may be undeliverable (due to their development being dependent upon an unviable requirement for associated infrastructure or policy requirements) all local authorities must ensure that their development plans are deliverable.

Previous national policy initiatives (contained in PPG3, 2000) of a sequential approach to the release of land for development (often referred to as “brownfield first”) resulted not in more brownfield land being developed but in less greenfield land being released, resulting in an overall drop in the supply of housing land and a subsequent worsening of the housing crisis in this country (Graph 1). A return to such a policy approach would be disastrous with regard to meeting our objectively assessed housing needs.

 

Graph 1

 

Recent reductions in the proportion of greenfield/brownfield land being developed for housing have mostly been the result of the redefining of garden land as being moved in the monitoring figures from being previously considered as brownfield land to now being assessed as greenfield land. The housebuilding industry continues to support the redevelopment of brownfield land for housing – with more than 70% of new homes being delivered on brownfield sites. However, if we are to “boost significantly the supply of housing” (para 47) it is the deliverability of sites that should remain the focus not the simplistic measure of whether they are brownfield or greenfield sites. In this regard, local authorities and national government could do more to make brownfield sites deliverable if they wish to see an increase in brownfield land supply. But prioritising brownfield land without addressing deliverability would be a recipe for perpetuating the housing crisis.

Viability

In order to ensure that plans, sites and housing developments are deliverable (an essential part of the requirements of the NPPF) viability should be a key consideration for everyone involved in the planning system.

The recent Harman report into this issue is considered to be the most comprehensive piece of work with regard to viability of development plans and the RICS guidance on site viability can be applied to site specific calculations. These studies both conclude that it is very difficult to use a standardised formulaic approach towards viability assessment of either plans or sites given the two critical assumptions of the level of profit required by the investors in the development and the return required by the particular land owner involved.

NPPF references to ensuring that viability is a key consideration within the planning system are felt to be an essential part of the policy framework and a reasonable handling of this difficult and fluid issue. They also of course relate to the question of the deliverability of brownfield sites. 

Conclusion

Overall, therefore, the HBF considers that the NPPF has had a positive effect in contributing towards positive planning for housing and will, over time, ensure that we, as a country, can address our housing crisis through a robust development plan led planning system. 

We would, of course, be happy to discuss any of the above comments in greater detail with the committee at an oral session and look forward to the committee’s report in due course.

Yours faithfully 

Andrew Whitaker

HBF Planning Director

 

APPENDIX 1

Permissions to land: busting the myths about house builders and ‘land banking’

April 2014

CONTENTS
Part 1           Financial realities and the importance of permissioned land for house builders
 
Part 2           Previous independent reviews of the housing industry and land 
Part 3           Analysis of the Local Government Association’s report on unimplemented planning permissions 2013
Part 4           Home Builders Federation’s survey of members’ development pipelines

INTRODUCTION

House builders are often accused of hoarding land or ‘land banking’ by obtaining planning permission for new homes and then actively choosing not to develop these sites into homes and neighbourhoods for families to live in.

This short report summarises why the financial incentives for developers are heavily weighted towards actually developing land. It highlights how previous independent investigations have concluded that house builders do not ‘land bank’ and presents both an analysis of existing information published in 2013 by the Local Government Association (regularly cited as evidence that house builders hoard land), and also an extensive survey of the Home Builders Federation’s membership to determine the true extent of the industry’s current land supply.

By looking at the best available evidence, including reports authored by leading economists, the Office of Fair Trading and others, as well as analysis of existing reports and new research, it is clear that land hoarding does not occur in any systematic or concerted way by house builders. Furthermore, by any estimate or analysis, the volume of land being put into the planning system, through construction and into new homes is vastly short of the amount required to solve the housing crisis.

PART 1

Financial realities and the importance of permissioned land for house builders

Land, and permissioned land more specifically, is a house builder’s most important raw material. Obtaining a planning permission that can actually be implemented, including discharging planning conditions, can be a very protracted process. Then physically building and selling the homes will take time on top of this, with large sites taking many years to develop in their entirety.

Research by the Local Government Association in 2013 found that the average period between obtaining permission to full completion on a site was 28 months.[1] When the time taken to progress through planning is factored in this could easily extend the total period to three years or so as an average. However this average hides the fact that for larger sites, with more units, it can take several years to obtain an implementable planning permission, and then it will take many more years to build and sell all the dwellings on the site. The development time will be influenced not just by the time it takes to build the units, but by the capacity of the local housing market to absorb the flow of new homes for sale.

In order for home building companies to function as viable businesses they require an assured supply of permissioned land to build homes and must therefore hold enough land to sustain their businesses. In reality this is the opposite of ‘land hoarding’ or ‘land banking’; the more homes a company builds per year, and the faster the speed at which they are constructing and selling them, the greater the need the company has to buy and maintain a supply of permissioned land.  Delays can be caused by overly prescriptive planning permissions which fail to reflect prevailing market conditions. Where this has occurred, renegotiations will usually take place which can result in lengthy delays.

Securing ‘outline planning permission’ does not mean that construction can commence. Similarly, a great many sites of significant size are merely under option. Following approval of an outline permission, negotiations proceed with landowners to acquire the site under the terms of the option agreement. These negotiations can be protracted and will occasionally end in arbitration.

Planning permissions expire after a period of time. Local authorities have the power to set specific timescales for an individual development, but the default expiry date is three years from the time at which it was granted. If work on site has not begun towards the end of the three-year period, a developer will need to reapply for planning consent. In this case, the house builder would be ‘back at square one’, with no implementable planning permission, a piece of land which, without an implementable consent, would likely have decreased in value and be faced with the uncertainty and considerable expense of negotiating the planning process once again. With the costs associated with a typical planning application for a reasonable sized residential site often running to tens of thousands or even hundreds of thousands of pounds, allowing a planning permission to expire is not something that is usually done lightly.

In financial and accounting terms, too, house builders are motivated to build rather than ‘bank’ land. Companies are judged by their investors on the basis of their return on capital employed (ROCE), so once they have paid for a site and have achieved implementable consent there is a very strong, immediate commercial driver to earn a return on the asset by building and selling homes. Sitting on paid-for land damages their ROCE. House builders can only take profit from land by developing it (or selling it to another developer). By contrast, the financing costs of sitting on land are around 10-12% per year. If a house builder is not building homes the book value of the land will only ever correspond to its original cost regardless of the market’s movements. In a rising market, therefore, the financial incentives to get on and build homes on sites are generally even greater rather than less, as is commonly stated by those seeking to criticise house builders.

 

Furthermore, a house building company will be judged by investors on the land that is available to it. If one considers land to be a house builder’s most important raw material, a company seeking investment with little or no viable land in its ownership would be unlikely to attract the investment required to finance construction and generally operate as a well-functioning business. Without this and the investment that it attracts, house building rates would be greatly reduced.

PART 2

Previous independent reviews of the market and land

The issue of “land-banking” has been considered by successive independent reviews and investigations of the house building industry.

The Barker Review of Housing Supply (2004)

Economist, Kate Barker was commissioned by the Chancellor and Deputy Prime Minister in 2003 to examine the operation of the housing market and address land and planning issues that contribute to market volatility and a lack of supply. The immediate background was the failure of housing completions to rise in the 1990s in response to the improved economic and demographic conditions, so that by 2001 completions had fallen to their lowest peace-time level since 1924.

Barker dismissed the view that ‘landbanking’ was being actively pursued by house builders:

‘The Review has found little evidence, at least across the country as a whole, to substantiate concerns that option contracts and the practice of landbanking allow housebuilders to erect barriers to entry into the market’.[2]

The Callcutt Review of Housebuilding Delivery (2007)

The Callcutt Review was commissioned by the Government in 2006 to examine how the supply of new homes is influenced by the nature and structure of the industry, its business models and its supply chain. Careful consideration was given by the review team to the role of land in a house builder’s business model:

‘There are no doubt some individual cases where housebuilders hold land for longer than they need. But, in our view, the current evidence does not support the suggestion that this practice is at all widespread’.[3]

Office of Fair Trading: Homebuilding in the UK report (2008)

In 2007, the Office of Fair Trading (OFT) launched a wide-ranging market study into the home building industry. The study focused on why housing output was not meeting demand and particularly noted that landbanking aroused polarised views with a belief amongst some that developers were ‘hoarding land’ in order to profit from rising land prices:

‘We have not found any evidence to support the view that, at the national level, homebuilders are hoarding a large amount of land with implementable planning permission on which they have not started construction. This suggests competition has not been impaired by homebuilders mothballing permissioned land to create a barrier to entry and artificially raise prices even during the long upturn in the market until 2007. Equally, there is little evidence to suggest that homebuilders have been able to systematically obtain market power at a local level by acquiring planning permissions’.[4]

Savills report on Strategic Development Sites (2011)

In December 2011, Savills published a research document following a comprehensive survey of sites of 250 units or more. The study found that just 12% of sites (by number of units) were held by house building companies but this involvement is ‘concentrated at the construction stage where they control 18% of developments. In the early stages, through planning and even after planning had been secured, Savills found that the majority of sites were owned by social landlords, commercial developers and – until outline planning had been achieved – ‘other private sector’ organisations. The report explains the division:

‘This reflects housebuilders’ expertise in the construction and delivery of the finished product. By contrast, commercial developers and property companies are particularly dominant at the early stages (30%) where they focus on promoting the site and guiding it through the planning process’[5]

Molior report on Barriers to Housing Delivery in London (2012)

In an independently commissioned report for the Mayor of London in 2012, consultants, Molior were asked to examine the barriers to housing delivery in the capital. One of the major focuses of the report was on unimplemented planning permissions and why a large proportion of permissions were not being realised. The research found that 45% of permitted homes were in the control of firms that are not house builders. As with other aspects of the market, London is unlikely to be representative of the national picture but the report concluded:

‘Site-by-site interviews suggest the obvious: builders intend to build their sites, non-builders do not! So the fact that non-builders control almost half of the planning pipeline is a constraint on housing development in London. When accusations of land banking are directed at builders, those accusations are misplaced.’[6]

Savills analysis of planning pipeline data on ownership of sites in the planning process (2014)

In February 2014, Savills conducted an analysis of ownership of sites larger than 20 units that were in the planning process. Excluding sites on which Reserved Matters were required, house builders owned just over a third (34%) of sites of more than 20 units on which Outline Plans had been granted permission. Ownership of the remaining two-thirds of sites were split fairly evenly between other developers, promoters and investors, other private sector actors and the public sector which owned 1 in 8. Ownership of sites by house builders rose to 79% on sites with permission for Detailed Plans, leaving a fifth in the hands of non-house builders.

PART 3

Local Government Association’s report on unimplemented planning permissions 2013

In October 2013 the Local Government Association (LGA) published ‘An analysis of unimplemented planning permissions for residential dwellings 2013’. The report provided an update on a similar report published a year earlier. It is unfortunate that the data are sometimes quoted as representing ‘land banks’. In fact the data attempted to measure the stock of outstanding planning permissions, quite a different concept.

Analysis of LGA data on unimplemented permissions

Private and social sector planning permissions

At 31st March 2013, the LGA reports, there were 6,500 unimplemented schemes comprising 381,390 units that were unimplemented.

Even if these 381,390 units were fully implementable which is not immediately the case (see below), this number represents a strikingly small number in the context of the number of new homes required. Even at current house building rates, the number represents barely three years supply and compared with the 240,000 new homes actually required each year it represents just over 18 months’ worth of supply.

Of these unimplemented units, 323,385 are in the private sector (84.8%) and 58,005 are in the social sector (15.2%). These proportions are broadly in line with the overall proportion of permissions granted in 2012/13 – 82.6% of permissions were granted to private developers with 17.4% to social sector developers.

There is therefore no considerable difference in the proportions of private and social sector permissions that are unimplemented (as defined by the LGA report).

Breakdown of private sector unimplemented permissions

The LGA report provides a figure of 323,385 unimplemented planning permissions owned by private developers.

The report states that 167,746 – or 52% - are on sites under construction.

The report states that in 2012/13 the average time taken from obtaining planning permission to starting on site was 12 months.

The LGA data fails to differentiate between and outline planning permission with Reserved Matters and Pre-commencement conditions that require discharge prior to building out the site and an implementable planning permission when all conditions and outstanding matters relating to the access, appearance, layout etc of the development have been agreed with the Local Planning Authority and the house builder is capable of building. The method of data collection means that even if a consent has numerous Reserved Matters attached to it, it is considered that all have been agreed provided that one Reserved Matter has been dealt with. This means that the total number of permissioned plots will be an overestimate.

Based on the report’s estimate of average time to get on site, the private sector permissions obtained during 2012/13 can be discounted from this analysis. 137,047 permissions were granted during this period – 42% of all private sector unimplemented permissions.

This leaves 18,592 – or 5.7% - which were not under construction nor had been granted within the last financial year.

 

Unimplemented

  323,385

Of which:

 

Under construction

  167,746

Granted within last 12 months

  137,047

Remainder

    18,592


PART 4

HBF’s survey of members’ development pipelines

In early 2014 HBF undertook a survey of its larger members in respect of their land banks (a house builder will define its land bank as sites with some form of planning status). The results – based on some 2,800 sites with around 220,000 units – show that:

 

  • 63% of plots were on sites where work on site had already started 
  • Just over a quarter of plots were on sites with only an outline consent, and so production could not legally commence
  • 5% of plots were on sites that had planning permission but were awaiting the discharge of planning conditions before work on site could legally start;
  • 4% of plots were on sites that had an implementable planning permission but were awaiting start on site (e.g. as contractors were appointed, etc);
  • 2% of plots were on sites that had an implementable planning permission but were not started because they were not viable (2.5% of sites);

 

 

 

In summary, HBF’s survey found that house builders hold very few sites which are viable and have an implementable planning permission, but where work on site has not yet started. And in almost all of these cases the house builder will be going through the necessary final steps before work can start on site – work on site usually cannot start the day after a full planning permission is obtained. These results are in line with a similar survey carried out by HBF in 2008, and they accord with the findings of the OFT (see above).


[1] An Analysis of unimplemented planning permissions for residential dwellings 2013, The Local Government Association, October 2013 (p. 11)

[2] Review of Housing Supply – Delivering Stability: Securing Our Future Housing Needs, March 2004, (Paragraph 6.20, page 89)

[3] The Callcutt Review of Housebuilding Delivery (p.39)

[4] Homebuilding in the UK: A Market Study, September 2008, OFT1020 (p.6)

[5] Spotlight on Strategic Development Sites, Savills Residential Development Research, December 2011 (p.4)

[6] Barriers to Housing Delivery: What are the market-perceived barriers to residential development in London?, December 2012, Mayor of London (p.9 and pp.23-24)