The latest Housing Pipeline report from the Home Builders Federation (HBF), containing data supplied by Glenigan, shows that the number of planning permissions being granted for new homes continued to decline in the third quarter of the year – falling to another record low.
Planning permissions are seen as a key indicator of future supply levels, and the HBF says that the report confirms warnings that an increasingly anti-development policy environment and the worsening economy will see the number of homes built in the coming years fall to record low levels.
The key findings of the report are:
The number of sites granted planning permission in the past 12 months in England was the lowest quarterly figure recorded since the Housing Pipeline Report began in 2006
2,447 projects were granted planning permission, down 3% on the previous quarter and 19% lower than the same period last year
At 50,316, the number of housing units granted permission in England during Q3 of 2023 was down 12% on the previous quarter and 28% lower than Q3 in 2022
In the year to September 2023, the number of units gaining permission was 245,872 – a 15% drop on the previous year and the lowest for a 12-month period since Q3 2015.
The figures come ahead of significant changes to the National Planning Policy Framework (NPPF) expected to be announced tomorrow that will potentially lead to a further decline in planning permission approvals in the months and years ahead.
The government’s proposals are expected to water down requirements placed on Local Authorities to plan for enough homes to meet local housing need. The HBF says that the changes will effectively allow councils to build as few homes as they wish by removing the requirement for local housing needs assessments. These assessments, calculated using a ‘Standard Method’, will instead be made advisory.
Research conducted by consultancy, Lichfields, earlier this year predicted that these proposed changes to the NPPF could cause a drop of 77,000 homes a year, and more than 60 councils have already confirmed that they would cease production of local plans. The HBF says that confirmation of the changes to the revised NPPF this week will give further license to anti-development local authorities to delay the adoption of local plans and reduce levels of new housing supply.
All recognised housing supply indicators are now showing falls, including:
Net Supply of Housing figures for the year ending March 2023 showed a slight decrease in output compared with the previous year
Completions of new homes in the year to October 2023, as measured by the issuance of EPCs for new builds was down 4% on the previous year
Additions to the Council Taxbase in the year to September, showing the creation of new addresses saw a 1% fall on the previous year
If the 15% drop in approved units this year outlined in the Housing Pipeline report translates into completions as we move into 2024, housing supply could drop to fewer than 200,000 per year, the lowest since 2014.
Stewart Baseley, executive chairman at the Home Builders Federation said: “This is the inevitable outcome of several years of anti-growth policy and rhetoric. Businesses have warned for some time that the impact of Government action would be severe but now there is now a mounting body of evidence. If ministers continue with the proposals to rid the planning system of targets and consequences, no matter how it is packaged, it will result in fewer new homes and represents another victory for NIMBY backbenchers.”
“Removing the requirement for local housing needs assessments and allowing councils to plan for as few homes as they wish will see housebuilding in some areas collapse with investment in jobs and communities all suffering. Putting politics and Party management above the interests of those households struggling amidst a worsening housing crisis may seem attractive in the short-term but the long-term consequences for the economy and society are horrendous.”
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