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06/12/2021

Local authorities should allocate more sites to increase housing delivery

Words: Laura Edgar
Housing / Shutterstock_509223637

The country needs to increase delivery by 59,200 homes a year in order to meet the government's housing target of building 300,000 homes a year in England - which would require each local authority to allocate an extra four to five medium-sized sites per year or four to five large sites delivering over a longer period.

This is according to a report commissioned by the Home Builders Federation (HBF) and the Land Promoters and Developers Federation (LPDF). Planning consultancy Lichfields put the report Feeding the Pipeline together, as the third of three linked reports into the housing crisis.

Lichfields said the report raises major issues "not just for the growing housing emergency and the government’s target of building 300,000 new homes per year by the mid 2020s, but also in terms of ‘levelling up’ both geographically and the generational divide".

Feeding the Pipeline considers the number of implementable planning permissions on sites that are needed to achieve the government's ambition to deliver 300,000 net additional homes a year across England from the base which is currently 243,770 net additional homes delivered in 2019/20.

Lichfields also looked at the practices of the 10 major housebuilding companies to demonstrate "how important" the pipeline of housing is to deliver enough to meet demand.

The consultancy noted recently published government figures that showed to the year to April saw 216,490 net additions to the housing stock, an 11 per cent year-on-year decrease. this was attributed to the Covid-19 pandemic affecting housebuilding output and it came after seven years of increases.

Lichfields explained that one of the key causes of the housing shortage is the dwindling pipeline of planning consents for building plots - it must increase "rapidly" if the government is to meet its target.

Conclusions in the report include:

  1. The private housebuilding sector is responsible for more than two-thirds of national housing output (c.36 per cent from the 50 largest housebuilders alongside a circa one-third contribution from smaller builders). Boosting housing delivery will require a substantial contribution from these companies who rely on a supply of sites from land promoters which can deliver timely and implementable planning permissions on sites. The remainder comes from housing associations and local authorities.
  2. Looking closely at the 10 leading housebuilders, companies carry on average a 3.3 year pipeline of sites with planning permissions, which represent their housebuilding activity for the immediate future. This compares to local planning authorities, which need to demonstrate a five-year supply of deliverable sites to meet separate government performance targets.
  3. On average, each housebuilder outlet delivers about 45 homes each year. Increasing the number of ‘outlets’ – the active sites from which homes are completed – and doing so with a wide variety of different sites, is therefore the key to increasing overall output. Increasing the pace of build-out will only be achievable with a faster top-up of development pipelines with more sites. Otherwise, housing supply will simply dry up.
  4. To meet ambitions for 300,000 net additional homes per annum, the country will need to increase delivery by 59,200 homes per annum. This, in turn, illustratively necessitates between 474 to 1,385 additional implementable planning permissions on medium to large sites (50-250+ homes) making their way into the housebuilding sector. On average this means that each local authority might have to allocate an extra four to five medium-sized sites per year or four to five large sites delivering over a longer period.

Andrew Whitaker, planning director at the HBF, said: “If we are to get back to pre-pandemic housing supply levels, which were still well short of the government’s target of 300,000, more land needs to be allocated and major improvements to the planning process will be needed.

“Building enough homes to match demand requires sufficient sites to be allocated applications to be processed efficiently to the point where construction can start. Far too many sites are stuck in the treacle of the planning process, delaying work starting, driving up costs and preventing desperately needed homes being delivered.”

LPDF chairman Paul Brocklehurst added: “Contrary to the message often conveyed by local authority representatives, there is not a major surplus of planning permissions compared to the actual number of homes being built. The imbalance is explained by the length of the development pipeline caused in part by shortages of local government staffing and resources.”

Feeding the Pipeline can be found on the Lichfields website.

Image credit | Shutterstock

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