Urgent action demanded to boost delivery of new homes

Planning system not delivering anywhere near enough permissions to meet Government’s housing target.

The Government needs to take urgent action to significantly increase the number of housing developments being granted planning permission if it wants to hit its target of 300,000 new homes a year, new research by leading planning consultancy Lichfields highlights today.

The report, Taking Stock: the geography of housing need, permissions and completions, explores the existing pipeline of sites for housing development compared with what might be needed to meet the Government’s ambitions for 300,000 net additional homes per annum across England.

It dismisses the Local Government Association’s (LGA) recent claims that the level of unimplemented consents at 1.1million highlights that developers are ‘land banking’, pointing out that due to a variety of factors such as acquisition of the land, discharge of planning conditions, re-planning to reflect demand and lapse rates, that the number of consents required is in fact a minimum of 1.7 million.

The research, commissioned jointly by the Land Promoters and Developers Federation (LPDF) and the Home Builders Federation (HBF), states: “Ministry of Housing, Communities and Local Government (MHCLG) records the annual rate of permissions at 300,000 to 400,000 in recent years and this has generated the suggestion there are sites with planning permissions where landowners and developers are deliberately not bringing them forward. This is not the conclusion that should be drawn.

“Each year the number of permissions granted will include homes on sites that would not be built out in one or two years, some sites await funding for infrastructure (which can only be sought once permission is granted) and – very importantly – some permissions will be replacement permissions for approvals granted in previous years to reflect technical changes, re-design, alterations in housing mix or design detail. Successive years of units with permission will therefore incorporate significant double counting.”

The report seeks to understand how the number of homes with planning permission relates to housing need, planning permissions and completions at a regional and housing market level.

“To deliver 300,000 homes a year, 1.5m homes need to be built over a five-year period. In accordance with the NPPF 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,” it says.

Included in the analysis are a number of key findings:

• Planning permission for around 520,000 houses each year needs to be granted to ensure 300,000 homes a year are delivered compared with 372,000 new permissions recorded by MHCLG in 2019.
• A minimum estimated total stock of around 1.7 million homes with permission is needed.
• To achieve the Government ambition for 300,000 homes a year by the mid 2020s an increase of between 104,000 and 115,000 permissions per year is required in the next two/three years.
• The most recent data on permissions granted shows the steady upward trend seen between 2012 and 2018 has halted and may have begun to decline.
• As of March 2021, Glenigan data identifies a total stock of 1.3 million homes with live permission in the pipeline. Stripping out homes on large sites that build out beyond four years (the average time it takes to build and complete a housing site), leaves the equivalent of just 990,000 homes in the immediate pipeline, of which a significant number will already have been built.
• There are regional variations in the relationship between permissions and housing completions, with a north/south divide apparent. Many of the least affordable areas have the lowest number of live permissions.
• The areas with the highest need – including big cities – face the greatest barriers to boosting the number of permissions.
• When assessing the number of homes in the pipeline nationally, we need to know where they are – and where new homes are needed – to understand how many permissions are required to meet the 300,000 ambition.
• Government’s proposals for digitisation of the planning system should incorporate an enhanced approach to monitoring permissions and housing completions. 

Andrew Whitaker, planning director at the HBF said:

“The report clearly demonstrates that we are not currently granting anywhere near enough planning permissions to meet the Governments housing target. It also shows that for such a key Government objective, the way housing permissions are monitored is wholly unsatisfactory and does not provide a basis to make reasoned policy decisions.

“The contrast between this research and the recent statements by the LGA that there are enough extant planning permissions to meet the governments housing target of 300,000 dwellings per year clearly demonstrates a need for more robust data monitoring. Local planning authorities should be under an obligation to prepare more transparent data that reflects what is actually happening and avoids double counting of replanned schemes and lapsed consents. 

“The results of the housing delivery test published by the government in January showed that, far from being complacent, local authorities should work more closely with developers to understand the detail of their housing pipeline of planning permissions. Without this robust assessment in place we will continue to fail to deliver the houses the country so desperately needs.” 

Paul Brocklehurst, chairman of the LPDF, said:

“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. 

“The coarse analysis undertaken by the LGA is shown to be overly simplistic and ignorant of the practicalities of the implementation of planning consents granted. Post pandemic the demand for new homes has been exceptionally strong and as a consequence action is required now to improve the flow of planning permissions in many parts of the country to ensure that the housing crisis does not deepen further. 

“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. As each day passes those without a home to call their own find it harder and harder to get into the housing market, heightening the generational divide and harming our economy. The LPDF will be suggesting a number of ‘quick fixes’ to MHCLG to aid delivery in the short term, though it is clear to our members that something needs to be done immediately about the human resourcing at local planning authorities and the Planning Inspectorate in order to free the 1,000s of ‘trapped’ new homes through delays to determination, agreement of s106 agreements and planning appeals.”  

The report is the first stage of a three-part research study into the relationship between housing needs, planning permissions and building completions. Lichfields will be reporting back on the second and third stages of the work in due course.