Councils' record planning permissions create a 400,000 new home building backlog

LGA media release 6 September 2012

New research published today by the Local Government Association reveals a bumper building backlog of 400,000 new homes which have received planning permission but have not yet been completed, with building yet to start on more than half of approved plots.

At the current rate of construction it would take developers three-and-a-quarter years to clear the backlog by building all of the new homes local authorities have signed off.

Meanwhile, Government figures show that councils are more positive towards development than ever, with the overall percentage of planning applications being given the green light by local authorities hitting a 10-year record high last year.

The figures also show that the time taken by developers to complete work on site has increased by several months since the credit crunch, with the longest taking nearly nine years from permission being granted to homes being built.

Sir Merrick Cockell, Chairman of the LGA, said:

"These figures conclusively prove that local authorities are overwhelmingly saying ‘yes' to new development and should finally lay to rest the myth that the lack of new homes being built is the fault of the planning system.

"Even if planning departments did not receive another new home application for the next three years, there are sufficient approved developments ready to go to last until 2016 at the current rate of construction.

"Councils are also playing their part to unlock stalled sites by contributing land and assets, forming partnerships with developers and overwhelmingly saying ‘yes' to growth through the planning system.

"To get Britain building again we need to address the lack of liquidity in the finance market and tackle the shortage of mortgages for struggling first-time buyers. The planning system has been massively reformed under this Government and it is clear that unlocking frustrated demand, not increasing supply, is now the most urgent problem in the housing market today."

The research provides findings from an analysis of unimplemented housing permission commissioned by the LGA and undertaken by Glenigan using data sourced in March 2012.

It gives the most detailed picture to date of the state of the nation's homebuilding construction industry.

The data compiled in the report shows that:

• In 2011/12 an estimated 2,536 schemes obtained planning permission, totalling 135,179 potential homes.
• There were 399,816 unbuilt homes with planning permission on 31 December 2011. Building work had yet to start on 52 per cent of the uncompleted developments. 
• The average time taken for a development to progress to completion having obtaining planning permission has lengthened from 20 months in 2007/08 to 25 months in 2011/12. One development completed last year came 8.75 years after planning permission was granted.

Councils are now calling on Government to focus efforts to boost housing growth on freeing up finance for developers and increasing the availability of mortgages for would-be home owners struggling to get on the housing ladder.

Sir Merrick added:

"The housing crisis means that we should be exploiting all avenues possible to bring forward high quality, locally appropriate development.  Measures to unlock finance and reinvigorate demand should be coupled with moves to enable councils, with their strong balance sheets, to invest further and faster in the homes we desperately need. 

"The Government should relax the restrictions on council borrowing so that they can pay for the construction of new homes and upgrade their existing properties, improving standards and bringing unusable properties back into use."

Author: LGA Media Office
Contact: Dale Atkinson, Local Government Association Media Office, Telephone: 020 7664 3333

ends

Notes to editors

• This research was commissioned by the Local Government Association (LGA) in March 2012. Glenigan undertook an analysis of the extent and scope of unimplemented residential planning permissions in England and Wales over the last five financial years (from 2007/08 until 2011/12). Read the full report and detailed methodology 
  Read the report
• The estimated three-and-a-quarter years worth of units that could be constructed is calculated by taking the total number of unimplemented planning permissions on 31 December 2011 (399,816) and dividing by data from the most recent DCLG housing statistics (see table 209: for permanent dwellings completed in England and Wales in 2011/12 (123,770 units).
  Communites and Local Government report
  Live tables on house building
• Planning permissions refers to all planning permissions received by local authorities:
  There has been an increase in the proportion of accepted permissions for all planning applications over the past 10 years, with councils making positive decisions 87 per cent of the time in 2011/12.
  Data is sourced from the latest DCLG housing statistics P120:
  Read the statistic reports
• Stock owning local authorities successfully completed the transition to new self-financing arrangements on 28 March 2012. Overall, some 130 authorities paid over £13 billion to the Government and the Government paid off circa £6 billion of loans for the remaining authorities. The move to self-financing will allow increased borrowing and flexibility to invest in existing and new stock – up to a pre-determined centrally-set cap. The total borrowing headroom for councils is £2.87 billion. This is spread across 169 councils with 27 of these having no headroom at all. The average amount of borrowing headroom is £17 million.
   

See also:
Mapping unimplemented planning permissions by local authority area
Planning for growth: LGA briefing 4 September 2012
LGA briefing on planning permission 4 September 2012

 

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7 September 2012