In the ever-evolving world of property development, there’s one obstacle that seems to loom larger than ever before: the dreaded planning permission process. Recent reports have highlighted a concerning trend – a drastic drop in planning applications in England. This month’s Brickflow Industry Insights dives deep into the statistics, shedding light on the consequences for both developers and the future housing market.
The Planning Quandary
Obtaining planning permission has become an uphill battle for property developers. Conversations with industry insiders reveal that planning applications and permissions are plummeting, particularly in key areas like London. This alarming trend points to a potentially severe shortage of new housing stock by 2025. While this might sound like a gloomy outlook, it presents a unique opportunity for developers eyeing shovel-ready projects.
Struggling for Solutions
In response to the declining trend, policymakers are stepping in with measures aimed at addressing the situation. However, critics argue that these efforts might be too little, too late. To understand the full scope of the problem, we delve into the planning statistics, examining the decline in applications and permissions over the years.
The Grim Statistics
Government figures paint a stark picture of the decline in planning applications. Recent data reveals a significant drop in applications compared to previous years. For instance, in the first quarter of 2023, planning authorities received 13% fewer applications than in the same period last year. These figures, when analysed over a seven-year span, reveal a steady decline since 2017.
The Housing Pipeline Report
The Housing Pipeline Report brings further insight into the crisis, indicating that Q1 2023 witnessed the lowest quarterly number of housing projects granted permission on record. This decline is particularly pronounced in affordable housing-led developments and small sites. The report’s findings underscore the urgent need for effective solutions to prevent the housing shortage from spiralling out of control.
Population Growth vs. Housing Shortage
As the UK’s population continues to grow, the housing shortage becomes increasingly dire. The shortfall, estimated between 1.5 to 4.3 million homes, poses a significant challenge. Even if past building targets had been achieved, it would take decades to bridge this gap. With population growth and net migration projected to continue, the pressure on the housing market will only intensify.
Dissecting the Planning Predicament
A multitude of factors contribute to the planning crisis, from under-funding and under-staffing of local planning authorities to complex and discrepant decision-making processes. Moreover, the discretionary nature of the planning system results in inconsistent approval rates across different local authorities, adding to developers’ frustrations.
SME Developers
Bearing the Brunt Small and medium-sized developers (SMEs) feel the pinch most acutely. Disproportionate upfront costs and the burden of numerous discretionary decisions slow down their progress. A shift towards a more rules-based planning system and the integration of technology could offer much-needed relief to SME developers.
The Road Ahead
As the gap between housing demand and supply widens, concerns about the future intensify. The prospect of a potential price spike and increasing demand looms on the horizon. Developers are advised to capitalise on the current market dynamics, pushing through the planning process to deliver projects at a prime time for the housing market.
The dwindling planning permission landscape paints a challenging picture for property developers and future homebuyers alike. While recent reforms offer a glimmer of hope, a more comprehensive approach is needed to address the root causes of the crisis. The upcoming years will undoubtedly be crucial for the housing market’s trajectory, requiring innovative solutions and collaborative efforts to ensure a stable and prosperous future.
