Planning permissions for new homes half the number required to meet housing demand

Planning permissions for new homes have fallen to their lowest level in five years and now stand at around half the number required to meet housing demand, new figures have revealed.

The figures, released today in the Home Builders Federation’s latest Housing Pipeline report, reveal that approvals for just 27,732 homes across England were granted in the final quarter of 2011 - down 5% down on the previous quarter and down 6% on the same period in 2010.

The figures show that, overall, just 115,000 planning permissions were granted for new homes in 2011, half the 2006 level and half the number required to meet demand, the HBF said.

The total number of permissions granted in 2011 was the lowest since HBF started the survey in 2007.

The figures also show the average quarterly number of planning permissions in 2011 was 28,853 compared with 33,535 in 2010 and 53,116 in 2006.

The HBF said that as planning permissions granted now would, in the main, be built during the next three or four years, the figures reveal the potential for intensifying the country’s housing crisis.

Stewart Baseley, HBF executive chairman, said: “This is a stark reminder as to why government must stand firm and deliver a robust and adequate planning system.

“The government has recently unveiled some very positive measures aimed at boosting housing supply, particularly the NewBuy scheme, but they cannot succeed unless we have a truly pro-growth functioning planning system.

“The new system must provide enough viable land to build the number of homes the country needs. Continuing the current record low level of house-building is storing up huge social and economic problems for the years ahead and the shortfall must be addressed.

“Building the homes we need would take millions off social housing waiting lists and enable beleaguered first time buyers to get a foot on the ladder. It could also create half a million new jobs, and give the country a huge economic boost.”

Allan Wilén, economics director at data company Glenigan, said: “The number of new homes securing planning approval hit a new low last year, falling below the previous low point set in 2009 during the depths of the recession.

“The near halving in social housing units securing approval was especially stark and combined with the continued weakness of private housing approvals leaves the overall number new homes at 132,000. This is half the level of annual approvals seen during 2006 and 2007 prior to the recession.”