Planning approvals for new homes across London are stalling. The first quarter saw just 4,320 new homes approved by London boroughs, a figure that is 64% down on the same period in 2015.
The statistics, revealed by research conducted for London agents Stirling Ackroyd, lay bare the challenge of delivering more new housing to meet the capital’s demand for homes. And, if the current rate continues, 2016 could end up delivering just 17,290 units against a recognised demand of 50,000 homes annually.
In addition to approval levels falling, there has also been a drop in new planning applications for new development. The quarter saw applications lodged for 7,050 homes, less than half the 14,400 lodged in the same period in 2015.
“It’s a sluggish and disappointing start to 2016, which should be a year of real progress,” said Stirling Ackroyd director Andrew Bridges. “In an election year, the most frustrating side to the slow pace of planning departments is that London has the drive, capacity and ability to take control of its housing problems. Londoners want change. And if you believe all the mayoral candidates’ speeches – everyone wants a positive outcome too.”
“But change isn’t happening. The number of homes are falling to new lows, contributing to a completely unfair and immoral housing shortfall. On the streets of the capital, homes are the top concern – and yet this isn’t being heard. Housing is politically fashionable – but sadly not politically practical. As the chancellor demonstrated in the Budget last month, housebuilding can slide down the agenda quickly. It’s imperative this slide doesn’t happen this summer after the new mayor takes office in City Hall. There’s no easy fix, and building alone isn’t sufficient to get people on the homeownership ladder. But enough new homes are a necessary starting point that is still so far away from reality.”
The latest statistics also shine a light on those boroughs that are approving good numbers of new homes – and those where planning authorities are overwhelmingly negative. Across London, the overall approval rate for residential submissions has dropped to 61%, from a much higher 82% in early 2015.
Havering is the least attractive borough to seek planning permission right now, having approved just 10% of new homes submissions in the last quarter. Hammersmith & Fulham was little better, with 17% of homes approved, with Bromley at 27%. In contrast, Westminster planners approved 95% of applications, and Barking & Dagenham, and Kensington & Chelsea, approving 94%.
In terms of absolute volumes of new homes, Westminster led the quarter with approvals for 626 new homes, followed by Enfield’s total of 520 approvals out of a total 615 submitted. Barking & Dagenham is in third place, with 379 approvals. The research notes that Enfield has substantially changed its stance, with its approval level having improved markedly.
Added Bridges: “Overall the number of homes allowed is far too low and normally it’s the east of the capital which carries the weight of new homes approvals. But even London’s eastern boroughs are struggling to reach the approval levels needed. Remaining scepticism about large developments may explain the drop, but a similar fall in the possible number of applications could also be suggestive of a reluctance to change the planning system. Fundamentally, more needs to be done to encourage developers and self-builds.”
The research also notes that the borough of mayoral hopeful Zac Goldsmith is easily the poorest performer, in terms of delivering new homes. In the first quarter, it approved 11 new units, an even lower rate than its 2016 total of just 120 homes.
LPA Perspective: The housing crisis awaits an early response from the new mayor. And getting more homes built is a key issue. The lower levels of applications may already be reflecting the fact that, at the luxury end of the market, the good times are over, with sales faltering as a range of fiscal measures make buying homes for investment less attractive. Other issues, such as the Brexit vote, are also being mentioned as one reason for delaying financial investment decisions.
At the other end of the scale, we should look forward a few months with the expectation that initatives such as Croydon’s housebuilding programme – and similar initiatives in other boroughs – will start to deliver more new homes, at more affordable prices, more quickly.