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236,000 approved homes a year evaporating into developer land banks

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Last week the latest data from the Office for National Statstics (ONS) highlighted that the number of new homes being started had fallen 8% in the last quarter and 2% year-on-year and while the property market continues to strain under the supply-demand imbalance, leading estate agency comparison site, GetAgent.co.uk, has looked at how many homes are actually being built compared to those gaining planning approval.

GetAgent.co.uk looked at data from Gov.uk on the number of planning applications and approvals over the last eight years and found that there has been a steady increase in the number of applications granted as a percentage of all applications, up from 73.5% in 2010 to 80.5% now. This is despite slower market conditions seeing a notable drop in the number of applications received during 2018, down 4%  from an eight-year average of 471,000 to 453,000.

However, the introduced ethos of ‘presumption towards approval’ via the National Planning Policy Framework does look to have boosted approvals, with an increase of 30,000 planning permissions per annum since 2014.

During this time, planning applications themselves remained fairly static but not only has there been a lift in planning approvals but more importantly, the number of actual houses being built as a percentage of these approvals has also increased by 30% to 42% since 2010.

Even with the help of a more efficient planning system redistributing weight in favour of approvals we’re seeing builders keep pace and complete more homes as a percentage of these bolstered approval levels.

However, while developer land banking has come under scrutiny and they do seem to be releasing more stock as a result, the practice seems to remain prevalent and continues to put a squeeze on much-needed housing supply.

Since 2010, an average of just 35% of planning applications a year were actually built and while this has increased to 42% so far in 2018, that’s still 58% of planning approvals being land banked by developers like Persimmon, Bellway, Bovis and Wimpey for a rainy day.

Had they delivered on every planning application granted since 2010, developers could have delivered an additional 236,170 new homes on average every year! Stock that would go quite some way in addressing the current housing crisis.

Colby Short, CEO of GetAgent.co.uk said, “An increase in the number of planning applications granted and the number of homes built is, of course, a positive thing, but when you consider the ‘housing deficit’ that still remains between the number of homes being approved for construction and the amount actually being delivered, it shows how much further we still have to go.

“We know it can be done as, despite a recent increase in the number of approvals, completion levels have kept pace and have increased in tandem.

“Of course, it wouldn’t make sense financially for a developer to reduce profits by flooding the market with housing stock, particularly in these current tougher market conditions. But for those unable to make that step onto the ladder due to the issue of housing affordability, the annual profits of these companies are probably far from their first thought.

“Further work is required to rebalance the pendulum to fulfil our national aspirations of homeownership and if a natural cool in house prices is the result, I think there are many that would warmly welcome it.”

Year Applications Granted as a % of applications
2010 73.5%
2011 73.8%
2012 75.3%
2013 74.8%
2014 75.3%
2015 77.8%
2016 79.2%
2017 80.2%
2018 80.5%

 

Year Houses Built as % of Applications Granted
2010 30.4%
2011 32.7%
2012 33.5%
2013 31.5%
2014 33.3%
2015 38.8%
2016 36.9%
2017 43.0%
2018 42.4% (YTD)

 

Planning applications granted to those received
Year Quarter Applications received Applications granted Granted % of apps received
2010 Q1 118000 77000 65.3%
  Q2 127000 91000 71.7%
  Q3 126000 97000 77.0%
  Q4 111000 89000 80.2%
   All 482000 354000 73.5%
2011 Q1 119000 78000 65.5%
  Q2 123000 89000 72.4%
  Q3 122000 95000 77.9%
  Q4 112000 89000 79.5%
    All 476000 351000 73.8%
2012 Q1 121000 82000 67.8%
  Q2 121000 90000 74.4%
  Q3 113000 90000 79.6%
  Q4 107000 85000 79.4%
    All 462000 347000 75.3%
2013 Q1 114000 77000 67.5%
  Q2 125000 92000 73.6%
  Q3 119000 94000 79.0%
  Q4 109000 86000 78.9%
    All 467000 349000 74.8%
2014 Q1 119000 78000 65.5%
  Q2 123000 92000 74.8%
  Q3 119000 96000 80.7%
  Q4 111000 89000 80.2%
   All 472000 355000 75.3%
2015 Q1 121000 83000 68.6%
  Q2 124000 95000 76.6%
  Q3 119000 99000 83.2%
  Q4 111000 92000 82.9%
   All 475000 369000 77.8%
2016 Q1 120000 86000 71.7%
  Q2 131000 101000 77.1%
  Q3 121000 102000 84.3%
  Q4 112000 94000 83.9%
   All 484000 383000 79.2%
2017 Q1 123000 90000 73.2%
  Q2 123000 99000 80.5%
  Q3 118000 99000 83.9%
  Q4 112000 93000 83.0%
   All 476000 381000 80.1%
2018 Q1 117000 88000 75.2%
  Q2 118000 94000 79.7%
  Q3 110000 93000 84.5%
  Q4 108000 89000 82.4%
   All  453000 364000 80.5%

 

Year Quarter Applications granted House Building – Completed (All dwellings) Houses built as % of Applications granted Approvals not built
2010 Q1 77000 26,430 34.3% 50,570
  Q2 91000 27,980 30.7% 63,020
  Q3 97000 24,650 25.4% 72,350
  Q4 89000 27,670 31.1% 61,330
   All 354000 106,730 30.4% 247,270
2011 Q1 78000 27,590 35.4% 50,410
  Q2 89000 29,560 33.2% 59,440
  Q3 95000 25,010 26.3% 69,990
  Q4 89000 31,870 35.8% 57,130
   All 351000 114,030 32.7% 236,970
2012 Q1 82000 32,070 39.1% 49,930
  Q2 90000 29,630 32.9% 60,370
  Q3 90000 24,780 27.5% 65,220
  Q4 85000 29,110 34.2% 55,890
   All 347000 115,590 33.5% 231,410
2013 Q1 77000 24,460 31.8% 52,540
  Q2 92000 28,610 31.1% 63,390
  Q3 94000 26,090 27.8% 67,910
  Q4 86000 30,290 35.2% 55,710
   All 349000 109,450 31.5% 239,550
2014 Q1 78000 27,340 35.1% 50,660
  Q2 92000 30,350 33.0% 61,650
  Q3 96000 27,750 28.9% 68,250
  Q4 89000 32,380 36.4% 56,620
   All 355000 117,820 33.3% 237,180
2015 Q1 83000 34,170 41.2% 48,830
  Q2 95000 37,130 39.1% 57,870
  Q3 99000 32,170 32.5% 66,830
  Q4 92000 39,010 42.4% 52,990
  All 369000 142,480 38.8% 226,520
2016 Q1 86000 31,410 36.5% 54,590
  Q2 101000 36,260 35.9% 64,740
  Q3 102000 35,810 35.1% 66,190
  Q4 94000 37,800 40.2% 56,200
   All 383000 141,280 36.9% 241,720
2017 Q1 90000 38,490 42.8% 51,510
  Q2 99000 41,640 42.1% 57,360
  Q3 99000 36,530 36.9% 62,470
  Q4 93000 46,760 50.3% 46,240
  All 381000 163,420 43.0% 217,580
2018 Q1 88000 35,640 40.5% 52,360
  Q2 94000 42,560 45.3% 51,440
  Q3 93000 38,470 41.4% 54,530
  Q4 89000 N/A N/A N/A
  All 364000 116,670 42.4% 247,330
Average of Yearly Totals

 

361,444 125,274 35.8% 236,170



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