Why fewer home approvals should be worrying the government
Rico Wojtulewicz of the National Federation of Builders (NFB) has been studying new research from Glenigan on housing delivery. The results are concerning to say the least.
The new analysis from Glenigan, a construction data company, shows 53,379 new homes were approved between April and June 2024. This is 13% reduction compared to the same period last year. Although it goes without saying that this figure is particularly concerning, instead of dwelling on the facts, Wojtulewicz looks to how our government can boost these figures for 2025. Arguably these suggestions couldn’t have come at a better time as Labour’s Annual Conference is currently underway in Liverpool and the Autumn Budget is just around the corner.
‘The new Labour government’s job has been made considerably harder by Michael Gove’s decision to remove housing targets and water down housing supply ambition,’ Wojtulewicz said. ‘Yet this is only half the story. We have seen many small and medium sized housebuilders (SMEs) exit the industry, not just because councils were allocating fewer sites, but due to the government adding new taxes and ignoring the business impacts of poorly crafted regulations, such as Biodiversity Net Gain.’
Wojtulewicz continued: ‘I have seen SME housebuilders, some older than the Labour party itself – builders who helped solve the post-war housing crisis – call it a day because the risks associated with planning are simply unaffordable and new regulations are removing any profitability. However, this isn’t just about housing supply; it’s also about the future of our workforce. These sized companies train eight in ten construction apprentices and favour directly employed workers and consistent supply chains.
‘The previous government, despite being warned about the consequences of their actions, have torched the construction industry with their party-political actions and to fix this, the Labour government now needs to get their head around how the industry operates in practice and what the price of big builder reliance really is.’
However, when Rachel Reeves delivered her keynote at the Annual Conference yesterday there was no detailed mention of how Labour plan on reforming housing in the UK.
Addressing the audience, Reeves remarked: ‘What you will see in your town, your city, is a sight that we have not seen often enough in our country – shovels in the ground, cranes in the sky, the sounds and the sights of the future arriving. We will make that a reality.’
Since coming into power, Labour have prioritised the development of larger projects. In July Reeves scrapped a series of infrastructure projects including the £2bn Stonehenge Tunnel and announced a review of the Conservative’s New Hospital Programme. What’s more, ministers yesterday published a working paper asking for views on its plan to introduce a system of ‘brownfield passports’ to speed up development on urban sites.
Though this seems positive, Wojtulewicz said ministers need to steer away from bigger developments as they take longer to complete and focus on smaller schemes if they stand any chance at meeting their 1.5million homes target.
‘Unless wholesale planning reform is delivered within the next twelve months, the drop in approvals will bite the government mid-way through their term. Not only do existing permissions need to be built first, but due to pre-commencement conditions to satisfy, legal agreements to agree and infrastructure to first build, it typically takes years to go from approval to spades in the ground,’ he explained. ‘It is crucial that the government explores which sized sites are seeing fewer approvals, because large sites of more than 250 can take five to ten years to go from approval to completion.’
Wojtulewicz said: ‘The National Planning Policy Framework (NPPF) review offers a chance to unpick the broken planning system and NFB will be submitting deliverable recommendations which aim to speed up decisions and supply. These include a ‘medium sized site’ definition of ten to fifty homes, an open ‘call for sites’ for smaller developments, more delegated powers, and reforms to deemed discharge.’
‘Alongside new towns and the New Homes Accelerator, our NPPF recommendations will get us much closer to achieving the 300,000 new homes a year target.’
In related news:
Irish housing company ditches hibernation to deliver new homes
