Upward Trend in Housing Planning Permissions Continues

29 May, 2013

Q1 permissions up over 10% year on yearFirst full year of NPPF sees over 20% increase

Figures released today in HBF’s latest Housing Pipeline report show that whilst the number of planning approvals for new homes for the first quarter of 2013 fell back on the previous quarter, the upward trend continued with a 10.5% year on year increase. The figures also give a first full year picture under the National Planning Policy Framework (NPPF), revealing a 21.7% increase on the previous 12 months.

40,633 dwelling permissions were granted in the first quarter of this year, down from 45,041 in Q4 of 2012 but up 10.5% on the 36,761 granted in Q1 of last year. It is the highest Q1 figure recorded for five years, but is still well short of the 55,000 permissions required on average per quarter to meet housing need or the 54,500 that were being granted on average during 2006/07.

Demand side support measures such as the Help to Buy Equity Loan scheme are starting to address the deposit gap and affordability barriers that have been the biggest constraints on housing supply in recent years. It is now vital the planning system provides sufficient permissioned land to allow home builders to increase supply over the next few years.

The Q1 figures provide our first full year picture since the introduction of the NPPF in March 2012. Glenigan, who compile the data for HBF, recorded that 144,427 permissions were granted in the 12 months to March 2013, up from 118,723 in the corresponding period a year earlier and the highest figure since 215,445 permissions were granted in the 12 months to Q1 2008.

This increase is undoubtedly down to more applications being submitted as a result of Government demand side measures and an improving mortgage market, but also reflects the positive planning principles of the NPPF and the robust appeals system being applied.

Under the NPPF, local authorities have more responsibility for what is built in their areas. They are required to assess their housing needs and then allocate sufficient land to meet them. Some local authorities are adopting the positive planning principles of the NPPF and are developing robust housing plans. Some are not.

The NPPF though is benefitting from an appeal system that underpins its principles and allows developers to make justified appeals.  House builders have lodged an increasing number of successful appeals in instances where local authorities have not met the requirements of the NPPF. This should act as in incentive for them to put robust plans in place as soon as possible to ensure they have control over development in their areas, as opposed to allowing ‘planning by appeal’.

Planning permissions granted now will, in the main, be built over the next three or four years. Around 115,000 homes a year are currently being built in England, against a demand requirement for 220,000 so the need to see a continued and steady increase on the number of permissions granted is quite clear.

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

“The overall trend in residential permissions is very positive and hopefully reflects both the principles of the new planning system and an improving market place.  But we are still well short of the numbers needed and have to see continuous and steady increases over the coming quarters.

“The Government has unveiled some extremely positive measures aimed at boosting housing supply. The Help to Buy Equity Loan scheme is making a real difference on the demand side but it will only succeed in increasing house building if the planning system allows home builders to increase activity.

“The NPPF gives much more power to local authorities to take control over what is being built in their areas. It is though underpinned by a robust appeals system that developers can use when justified. Hopefully this will help ensure local authorities put proper plans in place that meet the responsibilities they have to their communities.

“Building the homes we need could take millions off social housing waiting lists and enable beleaguered first time buyers to get a foot on the ladder. It could also create half a million new jobs, and give the country a massive and much-needed economic boost.”

Allan Wilén, Glenigan’s Economics Director, commented, “The dip in private planning approvals follows a strong performance in the final quarter of 2012 and appears to be a temporary “pause for breath. Given the improved sales volumes reported by many house builders and a recent rise in projects starting on site, Glenigan anticipates a renewed strengthening in approvals during the coming months. The rise in social housing approvals is encouraging, suggesting that social landlords are now bringing forward developments under the new funding regime.”

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Download latest Housing Pipeline Report

For media enquiries, or to arrange an interview, please contact Steve Turner on 020 7960 1606 / 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: www.hbf.co.uk

2.     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.

3.     The Housing Pipeline report for Q2 2013 will be published in September.

4.     Housing need figures based on DCLG Household Formation Projections. Latest figures show that the number of households required is over 220,000 per year – down on the previous estimate of 232,000.   https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/190229/Stats_Release_2011FINALDRAFTv3.pdf