Over 100,000 homes with planning consent yet to be developed

Despite the urgent need for more new build homes to help solve the existing housing crisis caused largely by a shortage of residential properties in relation to demand from buyers and renters, new research reveals that almost half of all new homes awarded planning consent over the past year have yet to be developed, fresh data shows.

According figured provided by Barbour ABI, the selected provider of the Government’s Construction and Infrastructure Pipeline, 238,000 residential properties were granted planning permission from September 2013 to August 2014, with contracts awarded accounting for only 129,000 units. This indicates a significant disparity between planning consents and builds getting underway on site.

The figures reveal that London and the South East accounted for 29 per cent of all planning consents in the in the residential sector – more than any other part of the country, followed closely by the North West and South West with 12 per cent and 11 per cent respectively.

In stark contrast, house building in the North East of England (5 per cent) and Wales (3 per cent) remained lowest.

“These latest figures clearly indicate that, while there are potentially enough homes in the pipeline to meet the Labour Party’s target of delivering 200,000 affordable homes a year by 2020, more needs to be done to get work underway so that the overall number of new homes being built can continue to increase,” said Michael Dall, lead economist at Barbour ABI.

Barbour ABI’s figures support the steady increase in total permissions granted recorded in recent quarters by Home Builders Federation (HBF).

Although the HBF’s data for Q3 has not yet been released, it is expected to show that planning permissions for new homes is at or near a six-year high.

The latest Housing Pipeline report for Q2 of this year, produced for HBF by construction analysts Glenigan, showed that planning permissions for 56,647 homes were granted in England alone, as more developers increase the rate at which existing sites are built out in order to meet higher demand for new homes, fuelled in part by the Government-backed Help to Buy scheme.

“The increase in the overall number of new homes getting planning approval is very positive,” said Stewart Baseley, Executive Chairman of the HBF. “Everyone is agreed that we need to dramatically increase house building to address our housing crisis and so getting more planning permissions is imperative.”

Despite the recent rise in house building levels, the Leader of the Labour party, Ed Miliband, in a recent political broadcast, accused big developers of sitting on land ready for development to boost its value, vowing to “get tough” on them if elected as Prime Minister at next year’s General Election.

He said, “We’ve got to break the power of the big developers because they are sitting on hundreds of thousands of places for homes with planning permission and not building because they are waiting for it to accumulate in value.”

But the HBF completed reject the accusation that developers hoard land that is capable of providing new homes.

A statement from the HBF said, ‘Three independent studies in the last decade, including most recently by the Office of Fair Trading, have all concluded house builders do not land bank.’

The Conservative Party has also attempt to distance themselves from Labour’s pledge to “break up the power of the big developers” in recent days.

The Tories last week pledged to incentivise local authorities to release land for self-build and custom-build housing, with Housing Minister Brandon Lewis revealing that 11 councils would get financial support to release land to increase house building.

Speaking at the Conservative conference in Birmingham, the Prime Minister David Cameron pledged to build 100,000 new homes for young first time buyers to help address the housing crisis, but “who will build them?” asks the Federation of Master Builders (FMB).

Responding to the Prime Minister’s speech, Brian Berry, Chief Executive of the FMB, said, “The Prime Minster has quite rightly placed housing on an equal footing with health and education, but 100,000 new homes is still too few when we need to be building 240,000 new homes every year.”

Berry is calling for a greater drive to support local house building companies to build the homes in the places that local people want to live.

Berry added, “The Prime Minister’s commitment to new housing needs to be supported by a range of delivery measures to help local house builders compete in the market. Improved access to finance and the availability of more smaller parcels of land for development would do much to help local house builders, and so help create the communities that housing alone cannot deliver.”