Record planning permissions show house builders’ investment continuing to rise

2 May, 2018

Record planning permissions show house builders’ investment continuing to rise

Future housing supply still reliant on large sites, freezing out small builders

Planning permissions were granted for over 350,000 new homes in 2017, a clear demonstration of the commitment of house builders to deliver even more new homes in the years to come, the latest housing pipeline report from HBF and Glenigan released today shows.

Housing supply is up 74% in the past four years, a remarkable achievement,  with over 217k new homes completed last year, meaning the industry is well on track to deliver the Government’s previous housing target of a million homes over the period 2015-2020. However, further improvements to the planning system and the business environment for small house builders will be needed to get closer to the Prime Minister’s 300k a year target set for the mid-2020s.

The 351,169 permissions granted in England last year is the highest since HBF and Glenigan started the Housing Pipeline series in 2006. These will be permissions that are built over the next several years, a positive indicator of future supply levels.

However not all of the permissions will yet be at the stage where builders can actually start work on site and one of the challenges for Government as it revises the National Planning Policy Framework will be to speed up the time it takes to get from an outline permission, when it is agreed to build on a plot of land, to an implementable one, whereby construction work can actually start.

Revisions to the NPPF also need to focus on why permissions are increasingly on larger sites as local authorities, faced with financial pressures, seek to minimise the number of areas on which development will take place. Whilst the number of plots approved in 2017 was 35% higher than in 2006, there were 3.5% fewer sites permitted last year. With larger sites typically requiring greater upfront capital and more extensive infrastructure, it can take longer for sites to reach peak build out rates, and SME builders are unable to compete for sites.

The latest report shows that:

  • Permission for 351,169 homes was granted in England in 2017 (highest since 2006 when reporting started)
  • The homes were on 18,079 sites (compared to 21,912 sites in 2007)

 

Stewart Baseley, Executive Chairman of the Home Builders Federation said:

“The record number of applications being submitted and approved is a clear demonstration of the industry’s commitment to ramping up housing supply even further than the unprecedented increases of the last four years. To build more home needs more land to come through the planning system more quickly, and to encompass a broader range of sites. SME builder numbers are down by more than 80% in recent decades as layer upon layer of legislation has worked against small firms and start-ups as well as those delivering specialist housing such as retirement homes.

Government should ensure councils are not just taking the easy option and encourage them to grant permissions on a range of sites by type and size rather than merely relying on a few larger sites to meet local housing need.”

Glenigan’s Economics Director, Allan Wilen, commented, “The residential development pipeline remains strong, with a rise in approvals during the fourth quarter taking the total for 2017 to 351,169 units, a 21% increase on the previous year. The increase in approvals bodes well for potential new housing activity over the coming year as housebuilders are able to bring forward development on these new sites in response to demand.”

 ENDS -

For media enquiries, or to arrange an interview, please contact Steve Turner on 020 7960 1606 or 07919 307760. Steve.turner@hbf.co.uk    

Notes to editors

  1. 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
  1. 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.
  1. 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
  1. ‘Permissions’ are measured when the first ‘reserve matter’ attached to the consent is approved. Before an ‘implementable’ permissions 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.
  1. 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.
  1. 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

HPL REPORT 2017 Q4 MAY_18

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