Major planning approvals slump to a decade low

The number of major housing projects granted permission fell to the lowest level in over a decade in the second quarter of the year, according to official figures.

The government data showed that just 898 major residential projects gained consent between April and June this year, 11% down on the same period a year ago, marking the first time the quarterly figure has dropped below 1,000 since the summer of 2012.

The figure is also the lowest since the government published comparable data, starting in April 2012. The data showed the drop in permissions came both from a fall off in decisions made by councils, also to an 11-year low, exacerbated by a reduction in the rate of schemes being approved, down to 78%, the lowest for eight years.

The latest quarter also saw a drop in minor residential permissions, though the decline was not as severe, with the drop in residential permissions as a whole down 8% on the same quarter a year ago.

The official figures from the Department for Levelling Up, Housing and Communities were echoed by separate planning permissions data published today by the Home Builders Federation. This data, based on an analysis conducted by construction data firm Glenigan, found that the number of projects gaining approval in the quarter was the lowest since the survey started in 2006.

However, it said the year-on-year drop was even more severe than that found in the official data, with the April to June quarter seeing a 20% decline in the number of sites gaining permission year-on-year.

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The HBF said the data was evidence of a “far reduced” appetite for investment among housebuilders due not just to the economic environment, but also to a “riskier planning environment” and “hostile political actions from ministers”.

Housebuilders have been complaining about a crisis in the planning system since covid lockdowns, which has been exacerbated by policy uncertainty created by abortive attempts at planning reforms.

The data also came as a survey by the Royal Town Planning Institute (RTPI) revealed further concerns about the operation of the planning system, with three fifths of town planners telling the Institute they did not think they would have resource in place to deliver the government’s Biodiversity Net Gain policy when it comes into force in November.

Under the government’s Biodiversity Net Gain (BNG) mandate, introduced in the Environment Act 2021, all planning approvals must be accompanied by a plan to see sites improve their biodiversity by 10%. However, the government has still not published the underlying regulations needed for the system to run, and local authorities have argued they don’t have the in-house ecologist expertise necessary to assess applicants’ proposals.

The RTPI survey found that 61% of public sector planners cannot confirm they’ll have dedicated BNG resource and ecological expertise in-house in place, and 79% of public sector planners believe that BNG practice would be improved with confirmation of additional ‘skills and staff’.

Stewart Baseley, executive chairman of the Home Builders Federation said: “Over recent years the policy environment has become increasingly anti-development and anti-business and as a direct result we are seeing a sharp fall in the number of homes being built.

“The Government’s capitulation to the NIMBY lobby on planning, its mishandling of water legislation and amidst a lack of mortgage availability the lack of support for first time buyers could see housing supply drop markedly in the coming years. Fewer homes being built amidst an acute housing crisis has clear social implications, in particular for young people, and will reduce economic activity and cost jobs.”

RTPI chief executive, Victoria Hills said the body’s findings on BNG “show that government is running out of time to prepare local planning authorities to assess biodiversity net gain on major planning applications as expected in November.”