Planning permissions hit new low

 10 September, 2012 | By Chris Berkin

Annual planning permissions have slumped to record lows, with less than 25,000 recorded in the second quarter of 2012.

According to a survey of residential planning data compiled for the Home Builders Federation by Glenigan, the 12 months to Q2 2012 saw the lowest number of permissions since the survey began in 2006.

The HBF described today’s figures as a “huge wake-up call” for local authorities to meet their responsibilities.

The figures were the first to be compiled since the National Planning Policy Framework came into force in March.

The quarterly 25,000 was the lowest figure since 2009, and is far below the 60,000 needed to meet officially projected need. It is also under half the 55,466 granted this quarter five years ago.

Prevailing economic headwinds and mortgage availability were cited as the greatest immediate constraints, with planning the biggest hindrance in the long run.

NewBuy, the government scheme to help buyers purchase new-build homes with small deposits, has been hailed as making inroads into the mortgage availability problem, having recently passed 1,300 reservations and with a new ‘challenger’ non-high street bank on board.

The NPPF replaced ‘top down’ planning via housing targets, giving local authorities power over delivering housing.

Last week saw a government blitz on planning reform, with regulations temporarily lifted on home improvements and plans to bypass cumbersome local authorities.

In England, housing is currently stagnating at a rate of around 100,000 a year – well below the projected requirement of 240,000 – although many firms continue to turn a healthy profit.

Edinburgh-based housebuilder CALA today posted yearly results showing that operating profits had nearly doubled, while revenue increased by around £40m.

The HBF says each home built creates 1.5 full-time construction jobs, and up to twice as many more down the supply chain.

HBF chief Stewart Basely commented: “Under the new planning system local authorities have much more power over what is built in their area.

“But with that power comes a responsibility to provide the housing their communities need. Government needs to ensure that councils are meeting this responsibility.

“Ministers have in the past year unveiled some very positive measures aimed at boosting housing supply, particularly the NewBuy scheme, but they cannot succeed unless we have a truly pro-growth planning system.

“The new system must provide enough viable land to build the number of homes the country needs.

“Continuing the current record low level of housebuilding is storing up huge social and economic problems for the years ahead and the shortfall must be addressed.”

Glenigan economics director Allan Wilén said: “The drop in residential planning approvals during the second quarter of 2012, after what had been a positive start to the year, is disappointing.

“In particular the slowing in private housing approvals indicates that housing market conditions remain fragile.

“While the number of private housing residential units approved during the first six months of 2012 was 5 per cent up on a year ago, the level of approvals continues to run at around half the level seen in 2006 and 2007.”