London’s planning system is allowing new homes at an annualised rate of just 27,470 as of the end of 2014, or just 69% of the target for 40,000 finished new homes each year announced by Chancellor George Osborne and London Mayor Boris Johnson in February and underlined in March’s Budget.
An analysis of planning applications across the city by London estate agents Stirling Ackroyd shows just 6,780 homes were given planning permission in the last quarter spread over 826 different sites. These approvals represent 80% of all potential homes receiving a planning decision in the fourth quarter 2014. This is out of plans for 8,632 possible homes in the quarter.
By contrast, if 100% had been approved, this could have allowed an annualised rate of up to 34,530 new homes, or 86% of the official target rate.
In reality the number of homes reaching completion stage currently stands at an annualised rate of just 18,440 after the final quarter of 2014 saw just 4,610 properties finished in the space of three months.
Despite this low base, London has seen an acceleration in finished homes. Last quarter’s figure represents a 30% increase from the third quarter of 2014. This is almost twice the acceleration in home completions seen outside the capital as across the rest of England there was a 17% uptick.
However, new home starts were far lower last quarter, at just 3,040 or an annualised rate of just 12,160 homes per year. If this pace of housing starts continues and is reflected in the annual rate of completed homes it would mean failing to reach even a third of the government’s annual target.
Out of all London’s boroughs, Tower Hamlets gave permission for the greatest number of new homes in the final quarter of 2014 at 1,197 dwellings spread over 25 different sites. This means more than one in six homes receiving planning permission in the capital was in Tower Hamlets, or 17% of the quarterly total.
Second to Tower Hamlets in absolute terms was Croydon, where 682 homes came through the planning system, followed by Richmond with 591 dwellings approved in the quarter.
At the other end of the scale Lewisham allowed just 11 new homes in the final quarter of 2014 out of a potential 18, while Kensington and Chelsea approved 13 out of 16 possible new homes and Lambeth only 17 homes out of a total of 40.
Comparing the number of homes given permission to the total number of potential dwellings applied for via planning applications, boroughs vary by the leniency or rigour with which they have interpreted their guidelines.
Greenwich and Hammersmith and Fulham take joint first place by this measure, with both boroughs allowing 97% of potential dwellings in the final quarter of 2014. Newham and Ealing also lead the rest of London, in joint second place approving 96% of potential homes.
By contrast, Southwark stands out at the bottom of the league table, rejecting 87% of possible homes in the quarter. The remaining 13% represents just 58 homes out of 448 that were applied for in Southwark.
‘Areas with the most new homes in the pipeline, such as Tower Hamlets, might feel able to reject other projects that might not fit the area. That could be a luxury of success. However, others might be missing out on similar levels of growth on current trends. Southwark is home to the densest area of new build potential according to our own research but is currently rejecting the greatest proportion of homes,’ said Andrew Bridges, Stirling Ackroyd managing director.
‘In the property market, London’s centre of gravity is shifting from traditionally fashionable areas to relatively affordable boroughs. Most of west and central London is now too expensive to even be an aspiration for the average younger buyer while a burgeoning demand for homes to rent is following the same trend eastwards and into less well explored corners of the capital,’ he explained.
‘Most vitally, London needs more developers submitting imaginative proposals in the first place. Local government, the London Assembly and the national government have a responsibility to encourage new building and seize the housing dilemma by the horns. There’s plenty of space and more than enough demand so realistic, costed and scaleable policies can provide the homes demanded by millions of people,’ he added.
