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 a lead indicator of future supply levels, and the latest report confirms industry warnings that an increasingly anti-development policy environment and worsening economy will see the number of homes built in the coming years fall to record low levels.
The report shows:
- 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 the sweeping changes to the National Planning Policy Framework (NPPF) expected to be announced tomorrow that will inevitably lead to a further decline in planning permission approvals in the months and years ahead and might see housebuilding in some areas completely collapse.
The Government’s proposals – a direct result of ministers caving to anti-growth Conservative backbenchers in December 2022 – are expected to water down requirements placed on Local Authorities to plan for enough homes to meet local housing need. The changes will, in effect, 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 as a result of the revolt of MPs led by Theresa Villiers.
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. Already Government’s promise to water down requirements on local authorities has more than 60 councils confirm that they would cease production of local plans, with many others biding their time and not progressing plans. Elsewhere, other councils are seeking to significantly reduce the scale of their housing allocations. 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.
Alongside the Government’s planning proposals, the ongoing failure of politicians to find a solution to the disproportionate ban on new housing by Government quango Natural England’s that is holding up 150,000 homes across swathes of the country is also continuing to impact development. This is despite the clear evidence that new homes are a minimal contributor to the nutrient levels in rivers. with research published by Brookbanks showing that the occupants of new homes account for just 0.29% of total nitrogen emissions each year.
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 Energy Performance Certificates 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.”
