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Planning permission for new homes drops to record low

  • 18/12/2023
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Planning permission for new homes drops to record low
The number of housing projects granted planning permission in Q3 fell two per cent quarter-on-quarter to 2,778, data from an organisation has shown.

The Housing Pipeline Report from the Home Builders Federation (HBF) revealed this was 18 per cent lower than last year, and a continuation of the downward trend in granted planning permissions for new homes. 

The number of projects given the green light was also down by 18 per cent when comparing the first nine months of 2023 to last year. There was also fall in Q2.

There were 61,221 housing units approved in Q3, an eight per cent decline on the previous quarter and 21 per cent lower than the same period in 2022. 

In the first nine months of 2023, 198,121 units were granted which was 18 per cent down on last year. 

Housing schemes with 10 or more units accounted for 91 per cent of approved units in Q3. On a quarterly basis, there was an eight per cent fall in these types of developments at 55,510 and this was down by 21 per cent on the previous year. 

The remainder of approved units were on smaller new-build projects of up to nine units, including self-build schemes, homes within non-residential projects and the conversion of non-residential properties. 


Sharp fall in social housing 

There was an eight per cent quarterly fall to 1,722 in the number of private sector housing projects with three or more units gaining approval. Compared to the same period a year ago, this was a 21 per cent decline. 

Some 54,638 units were approved, which was a four per cent drop on the previous quarter and down by a fifth annually. 

There were 76 social housing projects with three or more units approved in Q3, which was a 16 per cent decrease on Q2 and a 44 per cent drop on 2022. Some 4,358 units were approved in the social housing sector in Q3, which was a 42 per cent fall on Q2 and a 39 per cent drop on the previous year. 

Regionally, unit approvals in the North West, Yorkshire and the Humber and Scotland rose in the double digits quarter-to-quarter by 23 per cent, 35 per cent and 31 per cent respectively. 

By comparison, significant falls in unit approvals were recorded in the North East, East of England, London and Wales with declines of 70 per cent, 31 per cent, 41 per cent and 30 per cent respectively. 

For the year so far, Scotland and Yorkshire and the Humber were the only regions to record a rise in housing unit approvals with increases of 24 per cent and 14 per cent respectively. 

The largest decline was seen in London at 37 per cent. This was followed by the East Midlands, East of England, North West and the South West with drops of 35 per cent, 25 per cent, 20 per cent and 19 per cent respectively. 

England’s housing supply heading for nine-year low 

HBF said the number of sites granted planning permission in England this year was at the lowest level since the report began in 2006. 

Across England, 2,447 projects were approved in Q3 which was three per cent down and 19 per cent lower than 2022. There were 50,316 housing units granted permission in Q3. This was a 12 per cent quarterly fall and a 28 per cent annual decline. 

For the year to September, some 245,872 units were granted permission which was a 15 per cent decrease on last year. 

HBF said if this 15 per cent decline translated into completions next year, housing supply in 2024 could drop below 200,000 a year which would be the lowest since 2014. 


‘Fewer new homes’

Stewart Baseley, executive chairman at the Home Builders Federation said: “This is the inevitable outcome of several years of anti-growth policy and rhetoric. 

“Businesses have warned for some time that the impact of government action would be severe but now there is now a mounting body of evidence. 

“If ministers continue with the proposals to rid the planning system of targets and consequences, no matter how it is packaged, it will result in fewer new homes and represents another victory for NIMBY backbenchers.” 

He added: “Removing the requirement for local housing needs assessments and allowing councils to plan for as few homes as they wish will see housebuilding in some areas collapse with investment in jobs and communities all suffering. 

“Putting politics and party management above the interests of those households struggling amidst a worsening housing crisis may seem attractive in the short term but the long-term consequences for the economy and society are horrendous.” 

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