The recent disclosure that planning permissions for residential projects in England have plummeted to a historic low underscores the pressing challenges within the housing market. In the year leading up to June 2024, only 31,562 housing proposals were granted planning permission, marking an 8% decline from the previous year and the lowest figure since records commenced in 1979. This downturn presents a significant hurdle for the new government, which has committed to constructing 1.5 million homes during its tenure.
Focus360 Energy: property compliance services – pre-planning to post-construction. Learn more.
A principal factor behind this decline is the pervasive economic uncertainty. Developers are increasingly hesitant to submit planning applications due to escalating costs and waning buyer confidence. The surge in expenses related to materials, labour, and financing renders new projects less viable, resulting in a notable reduction in the number of applications. This economic backdrop is compounded by a broader apprehension within the market, leading to a stagnation in development initiatives.
In an effort to address these challenges, the government has rolled out several initiatives designed to expedite the planning process. Among these is the ‘brownfield passport’ plan, aimed at facilitating the redevelopment of brownfield sites. This initiative seeks to streamline the planning process, making it more accessible for developers to bring new projects to fruition. However, while these efforts are laudable, they are met with the persistent issue of NIMBY (Not In My Back Yard) activism, which has historically obstructed essential housing developments. Keir Starmer’s pledge to confront NIMBYism is a critical element of the government’s strategy, although the data suggests that the problem extends beyond mere rejection rates to a broader decline in planning applications.
Industry leaders, such as Tim Seddon, CEO of Retirement Villages Group, argue that a comprehensive reform of the planning system is imperative. Seddon contends that the current system is paralysed, perpetuating intergenerational challenges with profound social implications. To meet the housing demand, he advocates for the fast-tracking of urban brownfield site development and the release of lower quality ‘grey belt’ land. This approach could alleviate some of the pressures on the housing market and facilitate the construction of new homes.
The later living sector also presents a potential solution to the housing crisis. By offering high-quality housing options for older adults, this sector can help free up properties within the broader housing market. However, achieving this requires significant planning reform and adjustments to inheritance tax policies to remove barriers that currently hinder older adults from downsizing. These changes could stimulate movement within the housing market, making more properties available to younger buyers.
John Anderson, CEO of Allison Homes, emphasises the necessity for clear guidance and robust governmental support. He acknowledges that while setting ambitious housing targets is commendable, genuine reform is critical to ensuring that secure housing is accessible to all. The decline in planning approvals is not merely alarming but indicative of a looming crisis, exacerbated by regulatory obstacles, economic uncertainty, and inadequate support for homebuyers.
The impact of the decline in planning permissions varies across different regions. Some areas, such as Yorkshire and the Humber, have experienced a dramatic 54% drop in approvals, followed by significant declines in the East Midlands, London, and the South West. Conversely, regions like the North East, East of England, West Midlands, and Wales have shown increases in approvals, highlighting the uneven nature of the housing market crisis.
Drawing together these threads, the record low in planning permissions for residential projects in England is a complex issue requiring a multifaceted response. Economic uncertainty, high costs, and regulatory challenges have all played a role in the decline. While government initiatives such as the brownfield passport plan and efforts to address NIMBY activism are positive steps, they are insufficient on their own. Comprehensive planning reform, economic incentives, and robust support for developers and homebuyers are crucial to mitigate the housing crisis and achieve the government’s ambitious housing targets.
Be the first to comment