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Planning permissions for new homes fell 15% in the second quarter of 2018 as compared to the same period a year before, amid uncertainty over the future of Help to Buy.
That’s according to the latest Housing Pipeline report by the Home Builders Federation.
Permissions for more than 350,000 new homes were granted in England in the year to June, on 20,076 sites.
It was the first time for a decade that more than 20,000 sites have been granted planning permission in a 12-month period.
Meanwhile, the average permissioned site has increased in size by 58% over the course of the past 10 years from 19 units to 30.
Nonetheless, the number of planning permissions in Q2 was considerably lower (15%) than in the same period for the year before.
The HBF said that while the fall was “difficult to attribute to any single factor”, it may have been in part down to the uncertainty of Help to Buy after March 2021, as many plots currently being permissioned will be delivered into and beyond 2021.
It also pointed to uncertainty around new planning policies ahead of the publication of the Revised National Planning Policy Framework (NPPF) which was eventually published in July and local elections, which often lead to decisions being delayed by local authorities.
Housing supply is still well below the government’s target of 300,000 homes a year. In 2016/17 it climbed to 217,000, a 74% increase in four years. The HBF said last few years has seen a “massive reduction” in the number of SME developers and a greater supply base is needed if the 300,000 target is to be achieved.
The report also identifies some significant regional variations. Approvals were down on the same quarter last year in some areas including London, but in contrast, approvals were up in Wales (25%), Yorkshire and Humber (23%), South West (11%) against a year earlier.
Stewart Baseley, executive chairman at HBF said: “We have seen a 74% increase in housing supply in four years, and the report shows the commitment of the industry to delivering further increases. The fact that permissions are now running at over 350,000 a year shows that builders are investing in the land, and people needed to deliver more homes. If we are to get to 300,000 homes a year, we need to see consistently high levels of permissions being granted, and then crucially, processed efficiently. We also need to see the new planning system implemented by Local Authorities as intended and more sites, of all sizes, coming forward. Providing certainty over the future of the Help to Buy scheme, that has been central to the increases in output we have seen, is also key.”
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