Residential Development Pipeline Expanding

 A strong rise in planning approvals during the closing months of 2015 bodes well for housebuilding activity during the current year. The latest Glenigan/HBF Housing Pipeline report number of units approved during the final quarter of 20015 was 20% up on both the third quarter and a year ago. The rise, primarily driven by a an increase in the number of private housing units approved, lifted the number of units approved during 2015 as a whole to 281,000, a 5% rise on the previous year.

At 2,778, the number of private sector housing projects (schemes of 3 or more units) securing approval during the fourth quarter was 10% up on both the preceding quarter and a year earlier. However the number of units granted planning permission on private sector projects was 13% up on the preceding quarter and 27% higher than a year earlier.

The expanded development pipeline will help housebuilders to meet any strengthening in demand from house buyers. Furthermore the rise marked rise in approvals in the Midlands and North of England last year demonstrates that the recovery in housing market activity is becoming more established across the country.  

In contrast the number of social housing projects (of three or more units) remained weak in the fourth quarter, being 1% down on the previous quarter and 7% lower than a year ago.  The number of social housing units approved during 2015 Q4 was 11% lower than in the previous quarter, but remained 17% up on a year earlier. 

Peter Andrew, Deputy Chairman of the HBF, said;

“Planning permissions are a strong indicator of future levels of supply. The past two years have seen huge increases in building levels, with housing supply in England surpassing 180,000 homes per year in 2014-15, up 22% on the previous year. We still face an acute housing shortage in this country. Millions of young people remain at home with their parents and we estimate we are over a million homes short of what the country needs. Help to Buy equity loan is driving demand and helping thousands of first time buyers a week purchase a new build home and with interest rates remaining at historically low levels, demand remains strong.”

Allan Wilén, Economics Director, Head of Business Market Intelligence at Glenigan said;

“The level of planning approvals remains strong, driven by an increase in the number of private housing units approved. The firm development pipeline demonstrates that housebuilders are well placed to meet any strengthening in demand from house buyers.”

Many of the permissions counted in the report still have many hurdles to cross as they navigate the complexities of the planning system before actual building work can get underway – for example discharging planning conditions. The industry will continue to urge Government to streamline the planning process and ensure Local Authorities have the capacity to deal with the volume of applications now being processed so builders can get on to more sites more quickly.

The Housing Pipeline report now shows permissions granted on all sites. Previous versions did not include numbers for sites of under 10 units. All historic figures have been adjusted to reflect the change in methodology.

Click here to download the report.

Notes:

• The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk
• Glenigan is the UK’s leading provider of construction data, contract leads and construction market analysis. Combining comprehensive data gathering and exhaustive research with detailed statistical modelling and expert analysis, it delivers a trusted insight into UK construction trends and activity.
• The housing approvals data analysed in this report is drawn from Glenigan’s extensive database of current and planned construction projects. Glenigan’s detailed coverage of planned housing projects across the UK offers valuable strategic and tactical insights into developers’ active sights and pipeline, with sites tracked through to completion. www.glenigan.com
• ‘Permissions’ are measured when the first ‘reserve matter’ attached to the consent is approved. Before an ‘implentable’ permissions is granted that allows work to start on site, a planning obligations (S106) agreement will almost always have to be agreed and signed and all pre-commencement planning conditions attached to the permission have to be discharged. Some permissions will have up to 100 conditions attached.