Report shows firms had permission to build an extra 127,800 homes at the end of last year

Developers are sitting on enough planning consents to satisfy London’s housing needs for nearly five years, according to a report by a research firm.

The findings show that at the end of 2006, housebuilders had not yet started work on 127,800 homes for which they had received consent. This figure has increased 78,000 in the past five years, a rise of 160%.

The report, by London Development Research, says: “These consents, if built, would provide 4.6 years of London’s required supply using the Greater London Authority target of 27,596 new homes a year. The number of construction starts does not parallel this relentless upward march, suggesting that these permissions are not being put to good use.”

The overall number of construction starts increased from 22,000 units in 2005 to almost 26,000 in 2006, a 17% rise. London Development Research predicts that the number of housing starts could increase 10-20% next year.

The survey also shows that the number of applications submitted but not yet decided fell for the first time in six years, from 92,300 to 61,300.

Andrew Whitaker, the planning director of the Home Builders Federation, said: “There’s a huge gap between the number of consents and the number of completions. We are taking that very seriously and trying to address the issue with our membership.”

But he also noted that the report did not take into account the time that it took to build large schemes, such as Bellway’s 10,000-dwelling Barking Riverside scheme, a large development that has inflated this year’s total of unimplemented permissions.

He added that the obstacles to acting on permissions included negotiations over section 106 agreements and affordable housing contributions.