A new report published today by leading planning consultancy Lichfields raises major issues not just for the growing housing emergency and the Government’s target of building 300,000 new homes per year by the mid 2020s, but also in terms of ‘levelling up’ both geographically and the generational divide.
Urgent action is now needed to boost the number of developments of new homes if the government wants to tackle the housing emergency, according to the LPDF.
The shortage of new homes is contributing to soaring house prices, leaving many young people caught in the ‘generational divide’ and unable to afford to buy their first home, says the LPDF. One of the key causes of the housing shortage is the dwindling pipeline of planning consents for building plots. These must increase rapidly if the Government wants to meet its target of 300,000 new homes each year, it says.
The LPDF also believes the unprecedented housing emergency is having a major negative impact on the lives and mental health of millions of people as house prices and rents continue to soar.Shocking statistics highlight the impact on the lives of people who cannot afford to get on to the property ladder, those who live in overcrowded or dangerous homes, and those paying ever-increasing levels of rent. The LPDF says the housing crisis is getting worse despite the government’s desire to see 300,000 new homes built each year.
In 2019/20 the average age of a first-time buyer was 34 – in 2007 the average age was 27.This month the average house price in the UK has exceeded £250,000 – saving £311 per month, it would take 10 years to save for a 15% deposit.While saving for that deposit, the average house price will have increased by £69,000, or 38%.In 2020, the average cost of buying a home was 7.84 times the average income – in 1997 it was 3.54 times.
Lichfields was commissioned by the LPDF and the Home Builders Federation (HBF) to undertake research into the planning and development process and in particular the pipeline of sites for housing development. The report - Feeding the pipeline: Assessing how many permissions are needed for housebuilders– is the third of three linked research studies exploring the current housing crisis.
The Lichfields report looks at how many additional implementable planning permissions on sites are needed to achieve ambitions of delivering 300,000 net additional homes per annum across England from the current base of 243,770 net additional homes achieved in 2019/20. It also explores the practices within the 10 major housebuilding companies to show how important the continuing pipeline is to deliver sufficient homes to satisfy peoples’ needs and demands.
LPDF chairman Paul Brocklehurst said: “Currently it is the south-east of England and the hot-spots where prices are disproportionately high, it is young people who are finding it most difficult to cope in the housing market and it is the growing shortfall in affordable housing which is having the greatest impact on those most disadvantaged members of society.
“Contrary to the message often conveyed by local authority representatives, there is nota major surplus of planning permissions compared to the actual number of homes being built. The imbalance is explained by the length of the development pipeline caused in part by shortages of local government staffing and resources.”
Official Government figures published last week illustrated the scale of the issue, The year to April saw 216,490 net additions to the housing stock. This was an 11% year on year decrease as a result of the impact of COVID on house building output following seven years of successive increases. But even the 242k peak of the previous year was well short of the Government’s 300k target – with delays to the planning process listed by most developers as their biggest constraint on delivery,
Andrew Whitaker, planning director at the HBF said. “If we are to get back to pre-pandemic housing supply levels, which were still well short of the Government’s target of 300,000, major improvements to the planning process will be needed.
“Building enough homes to match demand requires sufficient sites to be allocated applications to be processed efficiently to the point where construction can start. Far too many sites are stuck in the treacle of the planning process, delaying work starting, driving up costs and preventing desperately needed homes being delivered.”
The report concludes:
- The private housebuilding sector is responsible for more than two-thirds of national housing output (c.36% from the 50 largest housebuilders alongside a circa one-third contribution from smaller builders).Boosting housing delivery will require a substantial contribution from these companies who rely on a supply of sites from Land Promoters which can deliver timely and implementable planning permissions on sites. The remainder comes from housing associations and local authorities.
- Looking more closely at the 10 leading housebuilders, companies carry on average a 3.3 year pipeline of sites with planning permissions, which represent their housebuilding activity for the immediate future. This compares to the Local Planning Authorities need to demonstrate five years’ worth of deliverable supply to meet separate Government performance targets.
- On average, each housebuilder outlet delivers about 45 homes each year. Increasing the number of ‘outlets’ – the active sites from which homes are completed – and doing so with a wide variety of different sites, is therefore the key to increasing overall output. Increasing the paceof build-out will only be achievable with a faster top-up of development pipelines with more sites. Otherwise, housing supply will simply dry up.
- To meet ambitions for 300,000 net additional homes per annum, the country will need to increase delivery by 59,200 homes per annum. This, in turn, illustratively necessitates between 474 to 1,385 additionalimplementable planning permissions on medium to large sites(50-250+ homes) making their way into the housebuilding sector.
- On average this means that each local authority might have to allocate an extra 4 to 5 medium sized sites per year or 4-5 large sites delivering over a longer period. Essentially, each area needs a broad spread or portfolio of sites to cater for peoples’ needs.
- The distribution and locations of those permissions needed will not be uniformly spread across the country.Some areas – where there are particular imbalances between the permissions that exist and are coming through the system and the number of homes needed in that area - will need to do more than others.This will include many constrained areas, such as areas affected by Green Belt, where Local Plan progress has been slow and implementable sites are not yet coming forward.