The HBF Housing Pipeline Report, based on data from Glenigan, reveals that approved planning permissions for new homes have reached their lowest level in ten years.
In 2024, only 242,610 housing planning approvals were granted, the lowest since 2014. This marks a 2% decrease compared to 2023 and a 26% drop from 2019, equating to 85,000 fewer approvals.
The government’s target calls for 370,000 new homes to be built each year
To meet government targets, housing planning approvals need to increase by 53%.
The number of approved housing sites also reached a record low in 2024, with only 9,776 projects receiving approval. This is the lowest figure since the Housing Pipeline Report began in 2006.
This marks the 11th consecutive quarter in which the annual total of approved sites has hit record lows, highlighting the ongoing challenges facing the housing sector.
The previous government’s housing policy is often cited as a major factor, along with external constraints on housebuilding beyond planning issues. While the current government’s planning reform efforts have been welcomed, much more action is required.
A lack of affordable mortgage lending is making it harder for people, particularly younger buyers, to purchase homes, dampening demand. Housing associations also face difficulties in taking on affordable housing projects, as securing planning approval remains a major hurdle for investing in new sites.
The higher taxes on newly built homes are another key issue, creating challenges for many, especially small and medium-sized builders.
Housing planning approvals reach “critical crisis levels.”
The HBF states that the government’s initiatives will not yield tangible benefits for several years.
Additional constraints on new developments include a lack of buyers due to insufficient government support for homeownership, a shortage of housing associations, limited capacity in local authority planning departments leading to increased time and costs for new projects, and a ban on developments in 74 local authority areas because of high nutrient levels in nearby rivers, which has reduced the potential for 160,000 new homes.
Neil Jefferson, chief executive of the HBF, said: “The latest planning figures show that housing supply in the short and medium terms is at critical crisis levels.
“Whilst we welcome the scale of the government’s housing ambition and the swift action on planning, the industry’s ability produce homes is being stifled by a range of issues outside of its control.
“Increasing housing delivery will require much more than just planning reform. Government has to address broader issues like financing for homebuyers and ensuring there are sufficient providers in the market to take on the affordable homes developers are building – and reduce the crippling levels of taxation being planned and imposed that are making development across swathes of the country unviable.
“In reality planning permissions and house building levels are falling and companies do not have the confidence to invest with SMEs in particular struggling and a growing number unable to continue to operate.
“The industry is keen to press the accelerator and play its part in delivering the homes, but we also need further government intervention is urgently needed to enable it to do so.”
Original source: PBC Today
