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UK housebuilding: is the planning system holding the sector back?

A recent report shows the planning system isn’t delivering enough planning permissions to meet the government’s targets for the housebuilding sector. 

New research highlights the need for urgent action if the government wants to hit its target of delivering 300,000 new homes a year across England. The planning system isn’t delivering near enough permissions to meet this housing goal by the mid-2020s.

The report, Taking Stock: the geography of housing need, permissions and completions, looks at the existing pipeline of sites for housing development. And then the study compared this with what is likely necessary to meet the government’s housing target.

Planning consultancy Lichfields undertook the research. The Land Promoters and Developers Federation (LPDF) and the Home Builders Federation (HBF) commissioned the report. This report is the first stage of a three-part study. Overall, the study is looking at the relationship between housing needs, planning permissions and housebuilding completions.

Looking at the number of planning permissions

The report sets out to understand how the number of homes with planning permissions relates to housing need and completions. The study also looks at this at not just a national level but a regional level too.

To reach the government’s housing goal of 300,000 new homes by the mid 2020s, about 520,000 planning permissions each year are needed. In 2019, the Ministry of Housing, Communities and Local Government recorded 372,000 new permissions. In conclusion, an additional 104,000 to 115,000 permissions per year is required in the next two to three years.

The report states: “To deliver 300,000 homes a year, 1.5m homes need to be built over a five-year period. In accordance with the NPPF [National Planning Policy Framework] requirement for local authorities to maintain a rolling five-year housing land supply, the number of homes with planning permission at any one time will need to be aligned with this objective, which means figures in excess of 1 million should be expected.

“In reality, the number of homes with planning permission will need to exceed the size of the pipeline, because some permissions will be delayed, re-planned or lapse, and some will deliver homes beyond a five-year horizon.”

Where is additional housebuilding needed the most?

There are regional variations with the relationship between housing completions and planning permissions. There is a strong north-south divide. Some of the least affordable areas have the lowest number of live permissions. Additionally, the areas with the most significant need, which includes big cities, face the greatest barriers to increase planning permission numbers.

More information will help better understand where new homes are most needed. Therefore, the government’s proposals to digitise the planning system should provide an enhanced approach to monitor housing completions and permissions.

Planning reform coming forward

In the past year, the government has brought forward planning reform. The recently announced Planning Bill will likely speed up and simplify the planning process by cutting red tape. In particular, this will reduce the time it takes for a standard housing development to go through the planning system.

Many of these changes are welcome. However, some in the industry would like to see more reforms come forward. This could help rectify the undersupply of housing across the UK and bring forward more high-quality new builds.

Paul Brocklehurst, chairman of the LPDF, comments: “This research highlights what we in the industry have realised for some time now, which is that the level of planning consents is not sufficient, especially in certain areas of England, to meet the demand for new homes.

“At a time when the Government is proposing fundamental reform of the planning system in the medium to long term we need to ensure that the existing system can operate more effectively now.”

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