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Think-tank says developers to blame for housing supply crisis

Published: Thursday, 8th September 2016

Latest research claims councils have granted enough planning consents to meet the government’s target of building one million new homes by 2020 but developers are failing to build them...

Councils have granted enough planning consents to meet the government’s ambition of one million new homes by 2020 but developers are failing to build them, latest research from independent think-tank Civitas has claimed.

New analysis from the think-tank has highlighted that:

  • Planning permission has been awarded in England for 2,035,835 housing units between 2006 and 2015. That is an average of 204,000 new homes a year, an annual rate sufficient to meet the government’s housebuilding target for this parliament of one million homes by 2020
  • Starts recorded by the government during the same 10-year period numbered only 1,261,350, however: an average of just 126,000 a year. This means that there have been 774,485 more permissions than starts, equivalent to 77,000 a year for the period
  • This shortfall has been growing wider over the past five years. A significant increase in the number of planning permissions granted since 2011 has not been matched by a comparable increase in starts or completions;
  • In the past two years (2014 and 2015), some 500,956 units have received permission, in line with the 250,000 homes a year that most housing economists think England needs as a minimum. In neither of those two years did recorded starts get above 140,000, however, little more than half of what has been approved
  • Last year (2015) there were 261,644 homes permitted for development, but just 139,680 recorded starts. This is a deficit of 121,964, the biggest by far over the 10-year period analysed and almost twice the level it was in 2010.

Daniel Bentley, editorial director of Civitas, said: "Local authority planning departments have been under enormous pressure in recent years and are frequently blamed by developers for holding up housebuilding.

"But what these figures show is that councils are issuing planning permissions in greater numbers than at any time for at least a decade. The bigger problem, and what lies at the root of our housing shortage, is that landowners and developers are not getting approved sites built out quickly enough.

"The answer to this must lie in changing the incentives for landowners and developers, including the imposition of contractual obligations that ensure residential development proceeds within a certain timeframe. 

"This in turn will mean giving local authorities much greater bargaining power in negotiations with builders over new developments."

Read the Civitas article.

Roger Milne