Planning permissions sustained at +350,000 as plans for growth continue
- Permission granted for 369,524 new homes in the year to June 2018
- Q2 figures show fall in number of permissions compared with same period last year
- Future of Help to Buy critical as builders finalise future investment plans
- Builders are seeking economic and policy stability
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.
Today’s Pipeline report shows that for the year up to June 2018, the picture was very positive with 369,524 plots granted planning permission on 20,179 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.
Speaking today, 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.”
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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.
- Housing supply – new dwellings, conversions and changes of use (such as office to residential) reached 227k in 2016/17. Factoring in demolitions, net supply – the measure on which the Government’s ‘1M in this Parliament’ target is based on, was 217k. Of these 183,570 were new build homes, up 74% in past 4 years.
- 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