Unit approvals must increase by over 150% if government is to meet its 370,000-home annual target
Data from the Home Builders Federation (HBF) has revealed the number of sites green-lit for development in the third quarter of 2024 was the lowest total since 2006.
The representative body’s latest Housing Pipeline Report showed a 10% decline in site approvals during the months July to September from the previous quarter, with 2,260 permissions granted.
The rolling annual total of 10,180 site approvals also represents a record low, with housing project figures falling since the first quarter of 2018.
Meanwhile, unit approvals are similarly going downhill. Despite a 2% increase in dwellings approved during the third quarter to 57,356, this figure is still 40% below the peak of 107,222 in the first quarter of 2021.
The rolling annual total of 240,661 units saw a 1% rise from the second quarter 2024 but remains 6% lower than the same period in 2023.
To meet the government’s target of building 370,000 homes annually, approvals must increase by over 150%, according to the report.
Regionally, some areas saw a more pronounced quarterly decrease in the number of homes being approved. The North East saw a 61% decline, while Yorkshire and the Humber approvals dropped by 49% and the West Midlands by 55%.
London saw a slight increase in yearly approvals, achieving permission for 44,000 residences, which is still 66% of peak levels.
Meanwhile, the sharpest decrease in the number of green-lit projects over the past 12 months were in the North West (-19%) and Yorkshire and the Humber (-18%).
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Neil Jefferson, chief executive of the HBF said: “The continued decline in planning approvals is deeply concerning and underlines the scale of the challenge we face in addressing the country’s housing crisis.
“We are seeing significant regional variation, with some areas experiencing severe drops in approvals, while others, like London, are still well below previous levels. This discrepancy highlights the need for targeted interventions that not only speed up planning processes but also provide clear support for both developers and homebuyers.
“The lack of affordable housing is impacting communities across the country, and without a stable demand for new homes, the industry lacks the confidence to invest in building the homes that are desperately needed.
“Increasing housing will require going beyond planning reform and addressing broader issues such as financing for homebuyers and a lack of providers in the market to take on the affordable housing developers build.”
The Housing Pipeline Report contained figures from construction data provider Glenigan.
The report comes after the latest S&P Global UK Construction Purchasing Managers’ Index showed residential work registered an overall decline in output during December with a score of 47.6, meaning the activity in the sector has now decreased for three consecutive months and the latest reduction was the fastest since June 2024.
The monthly Halifax House Price Index published today showed prices dipped by 0.2% month on month on average in December following five months in a row of rises.
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