A strengthening new housing pipeline
Glenigan Construction Insight| 17 December 2012
The flow of residential planning approvals strengthened during the third quarter of 2012, reversing the weakness seen during the preceding three months. Glenigan data published in the latest HBF Pipeline report reveals that some 36,500 residential units secured detailed planning approval during the third quarter of this year; a 15% increase against the same period of 2011 and up by over a third against the weak performance recorded during the three months to June 2012.
The rise in permissions was driven by both higher private sector project approvals and a surprise increase in social housing approvals. Combined with a strong performance by private sector approvals during the first quarter, the overall number of residential units approved during the first nine months of 2012 was 6% up on a year ago.
The data covers the second quarter since the introduction of the National Planning Policy Framework (NPPF) in April, suggesting that the new regime has not disrupted the flow of new approvals. Indeed the Home Builders Federation is hopeful that the rise is “a reflection of the positive principles of the new system.”
Under the NPPF, Local Authorities have more power over what is built in their areas. They are required to assess their housing requirements and then allocate sufficient land to meet it. The HBF report that some local authorities are abiding by the positive planning principles set out under the new system and developing robust housing plans, although some are not.
The NPPF also contains the provision of an appeal system that underpins its principles and supports developers where they are making justifiable appeals. The HBF have found that this is leading to an increasing number of successful appeals in instances where local authorities are behaving unreasonably; they believe that this should act as an incentive for councillors to put in place proper plans to ensure they have control over development in their areas rather than allowing ‘planning by appeal’.
Whilst the reforms may be helping to improve the flow of projects through the planning process, the rise in detailed planning approvals also points to a strengthening in developers’ confidence about 2013 market prospects.
Private sector projects provided the main impetus behind the rise in third quarter planning approvals, offsetting the weakness seen during the previous three months. If maintained the increasing number of projects successfully securing planning approval will help developers to open up new sites and increase construction activity as market conditions progressively improve over the next two years.