Housebuilders maintain record investment in land despite wider uncertainties
Industry committed to delivering Government ambition of ’more, better’ homes.
House builders are continuing to invest in land and getting new sites approved despite the wider political and economic uncertainty HBF/Glenigan’s latest Housing Pipeline report shows. Builders had a form of planning permission granted for nearly 370,000 new homes in 2018, the second highest annual total on record and well over double the number being granted a decade ago.
Whilst many of the permissions will still take months or years to navigate the remainder of the planning process, the numbers underline the commitment of the industry to deliver further increases in housing supply in the years ahead.
Housing supply is up 78% in the past 5 years with 222,000 homes added to the housing stock last year. Whilst the level of increase is unprecedented, the total is still some way short of the number of homes the country needs to be building. To address the shortfall, government has set the industry a challenging target of building 300,000 a year by the mid 2020s.
The industry has invested massively in recruitment and training in recent years to ensure it can build both the volume and quality of homes the country needs. The latest industry customer satisfaction survey figures show that whilst volumes continue to grow, quality and satisfaction levels are also now increasing.
The numbers released in today’s report count permissions that will, in the main, be built out over the next two to five years. Whilst they suggest further increases in supply will be delivered some uncertainties remain.
It is still taking far too long for permissions to be processed by local authorities to the point where builders can actually start on site. The industry is keen to work with central and local government to ensure that local authority planning departments have sufficient resources to deal with the increased level of applications being submitted.
The industry’s ability to turn planning permissions into bricks and mortar is also reliant on a level of economic stability, consumer confidence and an effectively functioning housing market generally. Unlike the second hand market, new homes sales numbers are at historically high levels but the sluggish second hand market, and consumer uncertainty generally clearly pose a threat.
Speaking today, Stewart Baseley, executive chairman at HBF said;
“Today’s report shows that despite the wider political and economic uncertainties, builders are maintaining record levels of investment. The industry is investing massively in people and land to ensure it can meet the challenge set by Government to deliver even more, high quality homes.
“Last year saw output continue to increase alongside improved customer satisfaction levels. Builders are acutely focussed on delivering further improvements in quality and service levels alongside investing in more land to enable further increase in supply.
“The industry continues to work with central and local Government to ensure local planning departments have the capacity to deal effectively with the increased number of applications. It is also pushing Government for confirmation that it will have ongoing access to skilled labour from abroad post Brexit, which will be key to its ability to build out these sites.”
Glenigan’s Economics Director, Allan Wilen, commented, “The development pipeline remains strong, with the number of units securing approval last year close to the record level seen in 2017. The high level of approvals over the last two years is reflect the sustained flow of projects with approval that are already under construction or progressing to site.”
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Notes to editors
- The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: hbf.co.uk
- Glenigan is the UK’s leading provider of construction data, contract leads and construction market analysis. Combining comprehensive data gathering and exhaustive research with detailed statistical modelling and expert analysis, it delivers a trusted insight into UK construction trends and activity.
- The housing approvals data analysed in this report is drawn from Glenigan’s extensive database of current and planned construction projects. Glenigan’s detailed coverage of planned housing projects across the UK offers valuable strategic and tactical insights into developers’ active sights and pipeline, with sites tracked through to completion. glenigan.com
- ‘Permissions’ are measured when the first ‘reserve matter’ attached to the consent is approved. Before an ‘implementable’ permission is granted that allows work to start on site, a planning obligations (S106) agreement will almost always have to be agreed and signed and all pre-commencement planning conditions attached to the permission have to be discharged. Some permissions will have up to 100 conditions attached.
- Net Housing Supply – the official measure on which the Government is basing its 300k target (new dwellings, conversions and changes of use, such as office to residential, less demolitions), reached 222k in 2017/18 an increase of 78% in the past 5 years. Of these 195,290 were new build homes.
- Housing Pipeline shows permissions granted on all sites. Previous versions did not include numbers for sites of under 10 units. All historic figures have been adjusted to reflect the change in methodology
- Annual totals since Housing Pipeline reporting series started in 2006.