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Third of permissions not built, claims Shelter

Words: Laura Edgar
Housebuilding / iStock_000004570153

Over the last five years, housebuilders have failed to build more than 320,000 homes that they have permission for, research by charity Shelter has suggested.

The charity said this equates to nearly one in every three homes in England approved.

In London, according to the research, the problem is “particularly acute”, with one in two being “phantom homes”.

Shelter said the country’s current housebuilding system encourages  developers to sit on land and “drip out new homes so as to keep prices high”.

It wants the government to get tough on developers by giving councils the power to tax those who are not building fast enough. Shelter wants polices outlined in the housing white paper, including granting planning permission to developers based on their track record, to be taken forward.

The charity’s research also suggests that the profits of the country’s top five housebuilders have increased by 388 per cent over the last five years, to a total of £3.3 billion in 2016.

Anne Baxendale, head of communications, policy and campaigns at Shelter, said: "While people across the country struggle with eye-wateringly high housing costs, developers' profits are soaring into the billions. Time and again we hear the ‘red tape’ of the planning system being blamed but the real problem is a system where developers make more profit sitting on land than they would by building homes.

"It's clear our housebuilding system has failed the nation but the government can turn things around by supporting a whole new approach. Shelter's New Civic Housebuilding model listens to the needs of communities and gives more powers to councils to get developers building the high-quality genuinely affordable homes we need."

New Civic Housebuilding would increase housebuilding outside the speculative model through land market reform, combined with targeted public investment, the charity said. Civic housebuilding starts by bringing in land at a “lower, fairer cost” and channels competition between firms into raising the quality and affordability of homes.

David O’Leary, policy director at the Home Builders Federation, said: “Housing supply is up by more than 50 per cent in just three years with the overwhelming contribution coming from national house builders.

“While headline planning permission data is growing at unprecedented rates, a reflection of builders’ intention to build more in the coming years, the majority of this land is not at a stage at which it can yet be built on.”

Delays in the planning system mean permissions can take a number of years to process the point where construction to start, O’Leary said, especially on very large sites with complex infrastructure requirements.

The cost and risk involved in securing planning permission has “hampered” the ability of small firms to grow with large companies, which dedicate “significant resource” to navigating the process.

“Many of these so called ‘phantom homes’ will be plots on sites where construction is underway  but it obviously takes time to actually build out all the homes.

“Oversimplified and ideologically driven analysis distracts from the efforts of builders large and small, public and private to tackle the housing crisis. A basic understanding of the common house builder business model demonstrates why land with an implementable planning permission is started right away.”

Tom Kenney, policy officer at the RTPI, told The Planner that Shelter’s research highlights the success of the planning system in delivering more permissions for new housing.

"It is important to recognise that there are a number of legitimate reasons why outline planning permissions do not translate into housing completions in the short-term. However these findings reaffirm the need for the government to find ways to speed up housebuilding."

He referred to the RTPI's 16 ways to tackle the housing crisis, which the institute launched last year, stating that some are particularly relevant here.

"To get more sites ready for development we need to know more about potential land for housing - especially who owns land or has permission or options to develop it. We need to align transport infrastructure and housing more effectively.  And local planning authorities need increased resources to be as efficient as possible in pushing developments forward."

Read more:

Report: 'Rigged’ house-building system is failing families

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