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London new build approvals down 29% in Q3

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  • 15/01/2016
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London new build approvals down 29% in Q3
London saw 5,740 new-build home approvals in the third quarter of 2015, a fall of almost 29% against Q2, findings published by Stirling Ackroyd show.

The figures give an annualised rate of 22,950 approvals for 2015, far from the government’s 42,000.

It is a 52% decrease from the yearly rate achieved in the first quarter of the year, which saw 47,460 approvals.

There were 8,280 applications for new homes in the capital in the third quarter, leaving an approval rate of 69% across London’s 32 boroughs, and a decline from the 76% of approvals seen in quarter two.

Even if all applications had been granted, the annualised approval rate would be 33,120 – below the necessary levels.

Some 5,680 home starts occurred in the third quarter, a far cry from the Q1 figure of 9,550, but a 14% increase on Q2 with 4,970 homes starts.

Q3 saw the highest level of new home completions of the year at 6,430, following 5,420 in quarter one and 5,370 in quarter two. However, this still falls short of the 25,720 annualised government target.

Andrew Bridges, managing director of Stirling Ackroyd, said: “Approvals simply aren’t stacking up. ‘No, no, no’ is being heard far too often and it can’t continue. A sustainable and realistic approach is needed in order to make sure new homes are being built – and London’s housing crisis tackled by the horns.

“The Chancellor may have seemed to initiate the first stage of changes in his Autumn Statement, but in reality it’s still an overwhelming task. And tackling London’s perilous planning departments is the first step.”

Bridges said a generation of Londoners are facing the prospect of leaving London in order to achieve homeownership and avoid vicious cycles of high rent.

He said planning officials need to accept that the game has changed and that councils can no longer afford to pick and choose, adding they need to be ‘both practical and pragmatic’.

“Starts and completions may have picked up slightly towards the end of the year – but it’s a hollow victory. These levels aren’t enough to trigger a shake-up of London’s planning departments.”

The construction industry saw a seasonally adjusted 3.1% growth in private housing volumes, with 1,991 units built in November last year, compared to 1,932 for the same period in 2014, statistics from the Office of National Statistics (ONS) show.

Commenting on the ONS statistics, Charles Haresnape, group managing director of mortgages at Aldermore, said: “The Home Builders Federation has said that the new house building targets are achievable, and proposed changes to planning regulations and incentives for building on brownfield land are positive steps.

“However, unless more is done by lenders to increase funding to smaller regional developers, the potential for the industry to reach 200,000 homes per year – a level of building not seen in Britain since 1989 – will be less likely.”

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