26 August, 2011

New figures reveal why Government must ignore ‘irresponsible scaremongering’ and plan positively

Figures released today in HBF’s latest Housing Pipeline report clearly demonstrate why Government must ignore recent scaremongering about its proposals for planning, and stand firm on its commitment to growth.

The decrease in planning permissions granted in Q2, to just 25,000, has further increased the gap between housing need and delivery. Around 60,000 homes are required per quarter to meet the current housing shortfall.

Headline stats

Just 25,171 residential planning permissions were granted in England in Q2 of 2011 It is the second lowest number of permissions granted in a quarter in the last 5 years 25,171 is 24% fewer than were granted in Q1 2011 And 23% fewer than were granted in Q2 2010 To meet projected household formations on average 60,000 permissions are required per Quarter

Planning permissions granted now will, in the main, be built during the next three or four years. At a time when fewer homes are being built in England than at any time since the 1920s, the figures reveal the potential for intensifying the country’s housing crisis.

The report, complied for HBF by Glenigan, also puts the recent disputes over planning policy into perspective. What should have been a sensible debate into the most important planning changes since WWII, has been hijacked by sensationalist and inaccurate claims from a number of anti-growth organisations determined to fight all and any development.

Emotive and misleading claims about development on greenbelt have blighted the ongoing consultation into the National Planning Framework (NPPF). The draft NPPF document empowers local people, businesses and charities to shape growth in their communities. It strikes a balance between economic growth, a presumption in favour of sustainable development and existing environmental protection

The social effects of continuing the undersupply of homes are obvious: five million people languish on local authority waiting lists, millions more live in over-crowded and substandard accommodation, whilst first-time buyers have all but disappeared – further stagnating the housing market.

Speaking today, Stewart Baseley, Executive Chairman of the HBF, said;

“These new figures paint a bleak picture. We already have an acute housing crisis that is affecting the quality of life of families, young and old, across the country and the economy. Today’s extremely low levels of permissions will only make things worse in the short term.

“The figures clearly reveal that while the debate about planning is currently being hijacked by irresponsible scaremongering from anti-growth groups our housing crisis is set to worsen.”

“Government must stand firm and deliver a planning system that supports home building and economic growth. If it doesn’t, the social and economic implications will be felt for generations.”

James Abraham, Economist at Glenigan, commented, “Planning approvals have been on a downward trend for eighteen months, and this continued over the second quarter of 2011. Although there was a pickup at the beginning of the year, the number of housing approvals has dropped to the lowest level in two years. The 29,100 units approved represented a 26% annual decline, and is less than half the number of houses approved on average per quarter in the years before the credit crunch.”

- ENDS   -

Download the housing market report

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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 200 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: With over 30 years experience, Glenigan is the genuine market leading provider of UK construction and civil engineering project, company and market information.
Part of the Insight Division of Emap Limited, one of the UK’s largest media businesses providing must-have information, magazines and events, Glenigan users enjoy small business intimacy combined with business security. The Housing Pipeline report for Q3 2011 will be published around Nov 21. Housing need figures based on DCLG Household Formation Projections. The number of households is projected to grow from 21.7m in 2008 to 27.5m in 2033, a rise of 5.8m (27%), or 232,000 per year. The latest projections have reduced household growth by approximately 20,000 per year  compared with the previous, 2006-based projections.

Useful stats

Permissions for fewer than 34,000 new homes were approved in Q1 in England, compared with 40,000 in Q1 2010 and against a quarterly housing requirement of nearly 60,000 based on the Government’s household projections. In Q1 2006 over 60,000 permissions were granted by local authorities 1.8 million families (5 million people) are currently on Local Authority waiting lists in England. FTBs aged between 22 and 29 have to save 45% of their take home pay every month for five years to afford a deposit The number of households is projected to grow from 21.7m in 2008 to 27.5m in 2033, a rise of 5.8m (27%), or 232,000 per year. (DCLG Household Formation Projections.) Jobs Calculator:
Each home built creates 1.5 full-time jobs -Michael Ball report Increasing house-building by 130,000 units per year (to Government household projection levels) would create 195,000 jobs. HBF estimates twice that number of jobs are created in the supply chain – close to 400,000 jobs. Over the last three years, home builders have invested almost £1billion in shared equity schemes to help maintain housing construction whilst helping close to 30,000 first time buyers get a foot on the ladder. HBF’s  Housing Market Report (May’11) shows that 91% of house builders now see the lack of mortgage availability as a ‘major constraint;’ on their ability to sell, and thus build, homes According to Government figures, even in its current crisis state, housing supply accounts for around 3% of UK GDP and provides between 1 and 1.25 million jobs in the UK. In February, Local Authorities learnt for the first time how much they will receive from developing. Some will gain over £4M in New Homes Bonus whilst others will receive nothing. The figures also show that some Local Authorities will in future be missing out on up to £27M a year by scrapping previous plans for homes or not building enough to meet the needs of their communities. The number of new homes completed in England in 2010 slumped 13% on the previous year – itself the lowest peacetime number on record since 1923. 18% of females and 29% males aged 20-34 still live with parents – ONS social trends Or; Over 1 million women and 1.7 million men aged between 20 and 34 are still living at home The average age of a first time buyer (FTB) purchasing a home without financial assistance is now 37. Whilst over 80% of people believe Britain needs more homes, particularly for first time buyers, only 50% of people would welcome more homes in their area - NHMB survey, Nov 2010.