"While challenges remain, the recent fall in mortgage costs and the fact that planning and development are front, and centre of the government’s objectives has already boosted sentiment"
- Knight Frank’s associate in residential development research, Anna Ward
The latest Ministry of Housing, Communities & Local Government report, which covers planning applications in England for Q2, reveals that England has reached a new record low for residential plans granted in Q2.
Approvals fell to just 7,609 – a stark 40% decline from the most recent quarterly peak in Q3 2016, when over 12,900 approvals were granted. This also represents a 5% drop compared to the same quarter last year.
On an annual basis, the picture is equally concerning, with residential plans granted down 8% year-on-year, reaching just 31,556 in the 12 months to the end of June 2024 – another all-time low.
London has been hit particularly hard, with the capital seeing just 1,192 residential approvals in Q2, the lowest figure since 2010.
Knight Frank’s associate in residential development research, Anna Ward, commented: “The supply pipeline of new homes across England is under pressure, with new applications falling sharply in recent quarters. This has been driven by a weaker appetite to build in light of higher finance costs, a weaker sales market, rising build costs and planning delays. This has contributed to a plunge in new homes coming forward and illustrates the extent of the challenge for the UK government which has pledged to get Britain building again.
"However, while challenges remain, the recent fall in mortgage costs and the fact that planning and development are front, and centre of the government’s objectives has already boosted sentiment and should give more developers confidence in bringing new housing projects forward. Crucially, those that act now in bringing schemes through the planning system will be selling new stock in a market facing a sharp supply crunch in the near term.”
Tim Seddon, CEO of Retirement Villages Group, added: “Today’s figures again confirm that the national supply of new housing is paralysed, perpetuating an intergenerational challenge with huge implications for the health of our society.
“We’re encouraged to see the new government make housing supply a key priority. It’s clear the planning system needs urgent reform, and we would like to see pledges to fast-track urban brownfield site development and release lower quality ‘grey belt’ land implemented as soon as possible.
“The later living sector has an important part to play by providing high quality housing solutions for older people. If planning reform happens and inheritance tax is structured differently, so it stops acting as a barrier to downsizing for the over 70s, our sector can also help free up the wider housing market.
“We have the tools to tackle this housing crisis. We now need to use them.”
