Lowest planning permissions on record show challenge new Government faces

10 Jun, 2024

Lowest planning permissions on record show challenge new Government faces

Ministers must work with industry to deliver new homes

The latest Housing Pipeline Report from the Home Builders Federation, containing data supplied by Glenigan, shows that in the 12 months to March 2024, the number of new homes and sites given planning permission has continued to plummet. The year to March 2024 saw the fewest new housing sites consented than during any 12-month period since the data collection began in 2006, showing that the housing pipeline is significantly smaller now than it was even during the aftermath of the Global Financial Crisis.

Planning permissions are a lead indicator of future supply levels, and the latest numbers confirm industry warnings about the impacts of changes to the planning system and the ongoing lack of support for hard-pressed first-time buyers. The figures also illustrate the stark challenge a new Government faces to increase housing supply in the coming years highlighting the need for ministers to work closely with the industry to fix the planning system, provide effective assistance to prospective first-time buyers and unblock the estimated 160,000 new homes still unnecessarily held up by a Government quango’s nutrient neutrality rules.

The report, which includes data for the beginning of 2024, shows:

  • The number of units achieving planning permission in the year ending Q1 2024 was 236,644, the lowest 12-month total for almost a decade - since Q3 2014. Year on year, this is a 13% drop, and 22% on the year to Q1 2022.
  • The number of units approved during Q1 2024 – 53,862 – is the lowest quarterly total since Q2 2015. This is a 19% drop on the previous quarter and 13% on the same period last year.
  • Looking to sites, the number granted permission in Q1 2024 in England – 2,472 – was the lowest quarterly figure since the HBF Housing Pipeline Report began in 2006 –a 10% drop on the previous quarter. It is around half of the number of sites that were being approved in the latter half of the 2010s, when housing supply was at its peak.
  • At 10,406, the rolling 12-month total of new sites consented was the lowest recorded in any 12-month period in more than 18 years and 13% fall on the 12 months to Q1 2023.
  • This new low for the number of sites consented is 24% lower even than the worst performance recorded during the aftermath of the Global Financial Crisis when 13,388 sites were consented during 2009.
  • Looking regionally, some areas saw even greater drops in the number of units being approved. In London, 7,613 units were approved in Q1 2024. This is the lowest quarterly figure since 2012. Additionally, it is a 39% drop on the same period last year and a 51% drop compared to Q4 2023. The rolling 12-month total for units approved in London was the lowest since Q3 2015.
  • Other regions seeing significant drops included the East Midlands, which saw a 47% drop on the previous quarter and 36% drop compared to Q1 2023; Yorkshire and the Humber which saw a 33% drop on the previous quarter; and the South East, which saw a 24% drop on Q4 2023.
  • The number of sites gaining planning permission dropped 25% quarter on quarter in London; 23% in both the East of England and East Midlands and 22% in Yorkshire and the Humber.
  • For private housing only, the number of units approved in England dropped 21% quarter on quarter and 10% year on year. Social housing saw a 12% drop quarter on quarter, and a 34% drop year on year.

Last week HBF published its Blueprint for how the next Government could deliver the homes the country desperately needs. These included;

  • Increasing housing supply: Establishing a clearer and more certain policy landscape including calls to reinstate mandatory housing targets and the Five-Year Housing Land Supply, reform of the Standard Method of Housing Need, the introduction of a 10-year plan for housing and a review of the green belt.
  • Fixing the Planning process: Tackling the systemic issues hindering delivery – including calls to ringfence planning application fees for planning purposes, increase the threshold for reserved matters submissions to be determined by committee, introduce a presumption of favour of development of small sites, and accelerate of the implementation of National Development Management policies.
  • Housing the nation: Homes to meet the country’s needs – including calls for a new, targeted first-time buyer scheme, action to resolve uncontracted section 106 units, a requirement for local planning authorities (LPAs) to assess the demand for housing of older people, the expansion of green mortgages and the abolishment of stamp duty for the purchase of homes with an A or B EPC.
  • Unblocking the housing pipeline: Finding a resolution to nutrient neutrality - including calls to bring forward legislation to unblock 160,000 homes currently on hold due to Natural England’s disproportionate mitigations, for Government to work with Natural England to review its nutrient mitigation calculator, extend planning permissions for sites currently on hold due to the issue, and require water companies to account for how they spend developer fees and invest in their networks.
  • Greener growth: Building blocks for high quality, greener homes - including calls to develop a roadmap for the talent pipeline needed to deliver low-carbon, sustainable housing, publish the outcome and implement the recommendations of the Industrial Training Board review, reform of the Apprenticeship Levy, and implement the Competition and Market Authorities’ recommendation for a single mandatory industry consumer code and access to the New Homes Ombudsman for all new build buyers.

Stewart Baseley, Executive Chairman at the Home Builders Federation said: “Amidst a deepening housing crisis and with house building levels already falling sharply, these numbers present a bleak picture for future housing supply.

“The report also puts into stark perspective the challenges a new Government faces to meet its housing ambitions with a pipeline smaller even than during smaller even than during 2009 and the depths of recession.

“Reversing the trend will require immediate and drastic action to remove the significant barriers to housing delivery we face.

“We need to see immediate action to reverse the damaging changes made in recent years to the planning system and to ensure local authorities have the capacity to deal effectively with permissions.

“We also need to see effective support put in place to help buyers purchase high quality, energy efficient new homes. For the first time in many decades, there is no effective Government support in place for prospective buyers.

“It is also essential that politicians find a solution to the pointless blockade of 160k homes now entering its 6th year as a result of nutrient neutrality, towards which new homes make a negligible contribution.

”The next government must grasp the nettle and be bold and brave if it is going to help meet the country’s housing needs. Doing so will deliver huge social and economic benefits and the industry stands ready to deliver.”

Alongside the Government’s planning proposals, the ongoing failure of politicians to find a solution to the disproportionate ban on new housing by Government quango Natural England’s that is holding up 160,000 homes across swathes of the country is also continuing to impact development.

This is despite the clear evidence that new homes are a minimal contributor to the nutrient levels in rivers. with research published by Brookbanks showing that the occupants of new homes account for just 0.29% of total nitrogen emissions each year.