Planning approvals fall to record low

The number of new homes and sites that gained planning permission plummeted to a record low in the year to March 2024, according to latest housing pipeline report from the Home Builders Federation. The research, which contains data supplied by Glenigan, shows that the lowest number of new housing sites were consented during the year than in any 12-month period since data collection commenced in 2006. Researchers said the housing pipeline is “significantly smaller” now than it was during the aftermath of the global financial crisis. Ten-year low The number of homes achieving planning permission in the year ending Q1 was 236,644, the lowest 12-month total since Q3 2014. It marked a 13% drop year-on-year, and 22% on the year to Q1 2022. The amount of homes approved during the first quarter – 53,862 – was the lowest quarterly total since Q2 2015. The number declined by 19% on the previous quarter and 13% on the same period last year. The number of sites that were granted permission in Q1 in England stood at 2,472, the lowest quarterly figure since the report began in 2006, and reflected 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. It was 24% lower than the previous record low in the wake of the GFC, when 13,388 sites were consented during 2009. The HBF said the latest numbers confirmed industry warnings about the impact of changes to the planning system and the ongoing lack of support for first-time buyers. The figures also illustrated the “stark challenge” that the next government faces to increase housing supply in the coming years. Regional variations Regionally, some areas saw even greater drops in planning approvals. In London, 7,613 units were granted consent in Q1 2024, representing the lowest quarterly figure since 2012. The amount fell by 39% on the same period last year and by 51% compared to Q4 2023. Other regions posting significant drops included the East Midlands, which saw a 47% drop on the previous quarter and 36% decline 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% reduction 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. In private housing, the number of homes 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. Stewart Baseley, executive chairman at the Home Builders Federation said the numbers “present a bleak picture for future housing supply”. Government action HBF called on the next government to work “closely” with the industry to “fix the planning system, provide effective assistance to prospective first-time buyers and unblock” an estimated 160,000 homes held up by nutrient neutrality rules. “Reversing the trend will require immediate and drastic action to remove the significant barriers to housing delivery we face,” said Baseley. “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.” Baseley added: “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 160,000 homes now entering its sixth 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.”