The latest figures on housing planning approvals indicate a significant downturn, signaling crucial challenges ahead for the industry.
- In the second quarter of 2024, planning approvals hit their lowest since 2014, marking a 3% decrease from the previous quarter and a 13% fall from Q2 2023.
- The Home Builders Federation highlights a continued two-year downward trend, raising concerns over government targets for new homes.
- Regions like London and the northeast have experienced severe drops, with London’s approvals decreasing by 42% compared to last year.
- The Home Builders Federation emphasises the necessity of government action to address the crisis, advocating for revived support schemes for first-time buyers.
In a concerning development for the construction industry, planning approvals for housing in Great Britain have significantly deteriorated. The second quarter of 2024 witnessed a sharp decline, with only 53,379 units receiving approval, a stark 3% drop from the preceding quarter and a 13% decrease when compared to the same period in 2023. This alarming trend reflects the lowest quarterly approval figures seen since 2014.
The comprehensive data, compiled by Glenigan for the Home Builders Federation, paints a bleak picture with the 12-month period ending June 2024 recording a worrying low in planning permissions. Only about 230,000 units were approved in this period, marking the lowest figures registered over the last decade. This decline highlights a stark contrast to the housing supply levels five to six years prior, when planning approvals routinely surpassed current numbers by approximately 100,000 units.
Further examination of regional data reveals that some areas are experiencing even more dramatic declines. London, for example, saw a significant 20% reduction in planning approvals compared to the previous quarter and an even greater 42% drop relative to the same quarter in the previous year. Similarly, in regions like the northeast and the east midlands, the downturns were severe, registering decreases of 50% and 42% respectively when evaluated against the same period last year.
The Home Builders Federation has articulated the serious implications of these figures, stressing the importance of immediate and effective government intervention. The Federation’s chief executive, Neil Jefferson, articulated the challenges facing the new government, highlighting factors such as affordable mortgage availability and the vital need for increased buyer support. His assertion underscores the necessity to invigorate demand for new homes to underpin industry investments, vital for delivering the required housing stock.
The report suggests that while optimism surrounds the government’s proposed planning reforms, they may prove inadequate without a reinvigorated focus on assisting first-time buyers or instituting a subsidy scheme to benefit potential homeowners. The timing of these reforms coincides with the forthcoming government budget, presenting an opportunity to reinforce commitments towards increasing housing supply and stimulating industry growth.
The substantial decline in planning approvals spotlights critical challenges for the housing sector, demanding urgent government response.
