Collapse in number of planning consents for new homes

The number of new homes in the pipeline has continued to plummet, with planning permissions being granted at less than half the rate of four years ago.

The latest Housing Pipeline report from the House Builders Federation released today reveals the third successive quarterly fall.  

The HBF says that just 33,000 UK homes were approved for construction in the last three months of 2010 – 9% down on the previous quarter and 22% down on a year ago.

Social housing was hardest hit with only 5,500 approvals – a matter of particular concern with five million people already on local authority waiting lists.

The HBF report comes just days after the Government published its 2010 housing statistics that showed  the number of new homes completed in England last year slumped 13% on the previous year – itself the lowest peacetime number on record since 1923.

The HBF warned that the implications of the collapse in permissions are stark, and exacerbate an already acute housing crisis. It said that the country currently has a housing shortfall estimated to be a million homes, with people being forced to stay with their parents for longer and first-time buyer levels at an all-time low.

It also said that homes typically take up to three years to build following the grant of planning permission, so the full implications of the drop will not be felt for some time.

The new Housing Pipeline report shows that through 2010 there was a steady fall in permissions granted for new homes in England, with a drop from over 40,000 in Q1 to under 30,000 in Q4.

HBF executive chairman Stewart Baseley said: “These figures are extremely concerning. A reduction in permissions granted now will see fewer homes built in future years, exacerbating the already acute housing shortage we are currently experiencing.

“The figures demonstrate the necessity for the Government to clarify exactly how the new localism-based planning system will deliver the homes and supply the growth we desperately need. Only by ending the ongoing hiatus caused by the scrapping of the old system without a ready replacement can developers and Local Authorities plan ahead confidently and effectively for new housing.

“It is also crucial that councils recognise the housing shortage and accept their new responsibility for housing supply. This will require understanding the new system, taking full account of the Government’s incentives and allowing developers to build the homes local residents and the country desperately need.”