Planning permission for new homes in England up almost 20%

Planning permission for new homes in England increased by 19% in the fourth quarter of 2013 compared to the previous three months, according to the latest report from the Home Builders Federation.

The quarter saw permission granted for 52,534 new homes, the highest quarterly total since the first quarter of 2008 and in total 174,471 planning permissions were granted in England in 2013, the highest annual figure since 2007.

The data also shows that 885 sites were granted approval, the highest quarterly total since the first quarter of 2008 and 51% more permissions were granted in 2013 than at the ‘trough’ in 2011.

The figures come on top of other data showing a steep increase in house building activity in recent months. Last week government released figures showed the number of new homes started in 2013 was up 23%, with a 29% year on year increase in private housing starts since the launch of the Help to Buy Equity Loan scheme.

The report is a strong forward indicator of future levels of home building and a large proportion of these homes will be built over the next two to three years.

Builders are looking to start on new sites as they build out their existing sites more quickly as demand for new homes increases, driven in particular by the Help to Buy Equity Loan scheme. Launched last April, the scheme is delivering around 2500 reservations a month. This increase in demand is allowing builders to increase output, building the homes the country needs and creating jobs on sites and in the supply chain.
According to the HBF its success demonstrates clearly why the government needs to start planning now to ensure it phases out the scheme is a way that is sensitive to the prevailing economic climate at the time and that doesn’t damage the market and threaten the momentum the scheme is generating. It is currently proposed to withdraw the scheme from April 2016.

The upturn in planning permissions also reflects the positive impact of the planning principles established by the National Planning Policy Framework introduced last year. The NPPF is having an increasing impact as local authorities work to put local plans in place or risk losing decisions on appeals as a result.

But the report also points out that whilst very positive in demonstrating an upward trend, the 2013 total figure is still well short of the 240,000 permissions required on average each year to meet the country’s level of housing requirements.
‘The increase in planning permissions will help support a continuation of the big increase in house building activity we have seen since early last year. After some very tough years, that saw housing supply drop to record low levels, it is now increasingly evident that house building activity is on the up,’ said , Stewart Baseley, executive chairman of the HBF.

‘Help to Buy Equity Loan is increasing demand for new homes and the industry is increasing its output as a result. People’s inability to buy in recent years has been the biggest constraint on the industry’s efforts to build more homes. If people can buy, builders will build. Help to Buy is allowing people who can afford to buy a home to do so, meaning builders can get on with building the homes the country needs,’ he explained.

‘As a result of this increase in activity, the industry is recruiting a significant number of people and training more apprentices. The supply chain is also gearing up to meet the increased level of demand, generating an economic boost the length and breadth of the country,’ he added.

He also pointed out that there are still not enough new homes being built. ‘The government needs to continue to implement policies that result in a rate of house building that meets the country’s housing requirements. Doing so will deliver significant economic and social benefits,’ he said.