Planning approvals for new homes in England have dropped to their lowest level in over a decade, according to the latest Housing Pipeline Report from the Home Builders Federation (HBF).
The report reveals a sharp decline in planning permissions granted for new units and sites, highlighting the significant challenges facing the government as it seeks to boost housing supply.
Planning approvals fall by 45% from 2010s peak
In the 12 months leading up to June 2024, only 230,000 homes were granted planning approval – the lowest figure since the early 2010s.
This represents a 45% drop from the housing approval peak of the late 2010s when roughly 330,000 homes were approved annually.
Additionally, the number of approved sites plummeted to 10,400, marking the lowest level since the report’s inception in 2006. This 53% decrease from the peak in 2008 raises concerns about meeting the housing demands of a growing population.
Neil Jefferson, Chief Executive of the HBF, warned of the wider consequences of the planning slowdown. "The steep fall in planning permissions starkly illustrates the challenge the new government faces to boost housing supply. While the speedy interventions on planning are very welcome, there are a number of determinants on housing supply levels," he said, calling for greater support for first-time buyers and mortgage affordability.
The report also highlights significant regional disparities. London saw a 20% drop in approved units in Q2 of 2024 compared to the previous quarter and a staggering 42% decrease from the same quarter in 2023.
Other regions, including the North East and East Midlands, reported even steeper declines, with planning approvals falling by 50% and 42%, respectively.
Why are planning approvals at record lows?
The steep decline has been exacerbated by restrictive planning policies from the previous government, which led to record lows in planning permissions over the past two years.
While recent efforts by the current government to reform the planning system have been welcomed by industry leaders, experts argue that further policy interventions are needed, particularly to stimulate demand by helping potential homebuyers.
The housing market has faced additional setbacks, such as the nutrient neutrality restrictions that they claim have stalled around 160,000 homes being built.
The lack of affordable mortgage options has also dampened market confidence, with many potential buyers unable to access financing.
Without robust demand, developers are hesitant to make the necessary investments in land, planning permissions and construction to meet the government's ambitious target of 370,000 new homes annually.
HBF seven-point plan for the Government's upcoming budget
The Home Builders Federation (HBF) has outlined key recommendations for the government to address the decline in planning approvals and boost housing supply:
- Speed up planning reforms and reverse anti-development changes to ensure faster approvals and meet community housing needs.
- Increase planning permissions by 55% to reach the target of 370,000 new homes annually.
- Support first-time buyers with government initiatives to improve mortgage affordability and stimulate housing demand.
- Tackle regional declines, particularly in London, the North East, and East Midlands, with tailored interventions.
- Resolve environmental restrictions, such as nutrient neutrality, which is delaying 160,000 homes.
- Restore confidence in investment in housing through stable government support and long-term policies.
- Use the upcoming budget to introduce policies that will stimulate housing growth and economic recovery.
As the government faces mounting pressure to "get Britain building again," the record-low planning approvals serve as a stark reminder of the work that remains to be done to meet the country's housing needs.
