Planning permissions for new homes continue to plummet

The number of planning permissions granted for new homes continues to fall sharply, down by 20% year-on-year, with 2023 seeing the fewest number of sites approved since records began in 2006. The latest Housing Pipeline Report from the Home Builders Federation, containing data supplied by Glenigan, confirms a picture of decreased investment in future housing delivery. The report, covering the period to the end of 2023, found: The number of sites that gained planning permission in 2023 dropped to the lowest level for a 12-month period since the report began in 2006. The 10,527 sites granted permission in 2023 represented a 16% decrease on 2022; a 23% fall on 2021 levels and only around half of the average annual granted permission between 2015 and 2019, when government policies were focused on improving housing affordability. The number of houses gaining planning permission in England during 2023 dropped to the lowest for any 12-month period since 2014. At less than 233,000, the number of houses approved in 2023 dropped by 20% on 2022, 27% on 2021 and was down by 30% compared to pre-pandemic levels, when housing delivery was increasing year on year. The figures released today come days after the government published housing completion figures for 2023, which confirmed that the number of new homes built in Southern England was down by 13% year-on-year. They also come just months after key changes to the planning system, including the removal of housing targets for local authorities. Some 64 local authorities withdrew or paused their local plans, the vast majority of these in Southern England, while government deliberated over these changes. Consultancy Lichfields warned the government in advance that its proposals could cause a drop of 77,000 homes a year. The Competition and Markets Authority has also warned the changes to the planning system would result in fewer planning permissions in the future. The HBF report shows that the number of units approved in 2023 was the lowest since 2015 in the South East, the lowest since 2013 in London and the lowest since 2012 in the South West. Year-on-year, each of these regions saw falls of 13%, 26% and 18%, respectively. The same regions have already seen annual falls of more than 10% in new-build completions. While some regions saw a slight increase in the number of homes approved in 2023 compared with 2022, across the country there were significant dips when compared with 2021. Approvals for the North of England dropped by 18% for 2023 compared with 2021, 23% for the Midlands and 28% for the South of England. Stewart Baseley, executive chairman at the Home Builders Federation, said: “Amidst a deepening housing crisis and with housebuilding levels already falling sharply, this report should send alarm bells ringing across government and the country. “As we have been warning for some time, the sharp decline in housing supply is the inevitable result of  several years of anti-growth policy and rhetoric. The politically driven weakening of the planning system will impact housing supply for years to come and needs to be urgently reversed. “Allied to the total lack of support for buyers in the Budget and the resultant impact on demand for new homes, it is an increasingly gloomy climate for industry and for a generation still clinging to the dream of home ownership. “Removing the requirement for local housing needs assessments and allowing councils to ignore the housing needs of their areas has been shown by the independent Competition and Markets Authority to significantly impact housing affordability moving forward. “Rather than listening to the hysterical demands of anti-development backbenchers, ministers would be wise to consider the plight of aspiring homeowners and act on the recommendations of the CMA to restore local housing targets and address the long-term inefficiencies of the planning process. “The social and economic implications of driving down housing delivery are deepening, with a generation unable to access decent housing and investment in jobs and communities all suffering. Putting short-term politics over the needs of the country will have long-term consequences for the economy and society.”  Photo by Ian Murray/imageBROKER/Shutterstock (14301038df)