According to ONS data, as the property market continues to strain under the supply demand imbalance, the number of new homes being started has fallen 8% in the last quarter and 2% year on year.
Estate agency comparison site, GetAgent.co.uk, looked at data from Gov.uk on the number of planning applications and approvals over the last eight years and found that there has been a steady increase in the number of applications granted as a percentage of all applications, up from 73.5% in 2010 to 80.5% now. This is despite slower market conditions seeing a notable drop in the number of applications received during 2018, down 4% from an eight-year average of 471,000 to 453,000.
However the introduced ethos of ‘presumption towards approval’ via the National Planning Policy Framework does look to have boosted approvals, with an increase of 30,000 planning permissions per annum since 2014.
During this time, planning applications themselves remained fairly static but not only has there been a lift in planning approvals but more importantly, the number of actual houses being built as a percentage of these approvals has also increased by 30% to 42% since 2010.
Even with the help of a more efficient planning system redistributing weight in favour of approvals we’re seeing builders keep pace and complete more homes as a percentage of these bolstered approval levels.
However, while developer land banking has come under scrutiny and they do seem to be releasing more stock as a result, the practice seems to remain prevalent and continues to put a squeeze on much needed housing supply.
Since 2010, an average of just 35% of planning applications a year were actually built and while this has increased to 42% so far in 2018, that’s still 58% of planning approvals being land banked by developers like Persimmon, Bellway, Bovis and Wimpey for a rainy day.
Had they delivered on every planning application granted since 2010, developers could have delivered an additional 236,170 new homes on average every year! Stock that would go quite some way in addressing the current housing crisis.
Colby Short, CEO of GetAgent.co.uk, commented: “An increase in the number of planning applications granted and the number of homes built is, of course, a positive thing, but when you consider the ‘housing deficit’ that still remains between the number of homes being approved for construction and the amount actually being delivered, it shows how much further we still have to go.
We know it can be done as despite a recent increase in the number of approvals, completion levels have kept pace and have increased in tandem.
Of course, it wouldn’t make sense financially for a developer to reduce profits by flooding the market with housing stock, particularly in these current tougher market conditions. But for those unable to make that step onto the ladder due to the issue of housing affordability, the annual profits of these companies are probably far from their first thought.
Further work is required to rebalance the pendulum to fulfil our national aspirations of homeownership and if a natural cool in house prices is the result, I think there are many that would warmly welcome it.”
