Future housing supply still too reliant on large sites

May 3, 2018 / Isla MacFarlane
Future housing supply still too reliant on large sites

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 shows.

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.

Dipa Joshi, director at Assael Architecture, said, “The Housing Pipeline report encapsulates the changing approach to affordable housing, with approvals on social housing units up 27% on the previous year and an increase in the number of affordable projects given approval also up. Fixing the UK’s housing market requires a significant increase in the number of affordable units on the market and this report shows that initiatives like shared ownership, discount market rent along with the growing strength of housing associations, and private sector joint ventures are having a palpable effect on the market. There is still a long way to go, but this feels like a breakthrough moment in the years following the housing white paper.”

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, added, “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.”

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