Planning prevents London reaching new homes target

Plans for new homes in London has been pushed backwards as Q3 2015 saw just 5,740 new homes in absolute terms approved, according to the latest London New Homes Monitor from Stirling Ackroyd.

In the last quarter, only 5,740 new homes were granted approval from all London borough planning divisions, giving an annualised rate of 22,950 approvals for 2015. This total is much less than government housing yearly target of 42,000.

Approval numbers declined by 29% from Q2 2015 and fell 52% from the annualised rate of 47,460 approvals granted in Q1.

In absolute terms, there were 8,280 applications for new London homes in Q3 2015, with 5,740 granted permission. This equates to an approval rate of 69% across the capital’s 32 boroughs – more stringent than the 76% of new homes approved during the previous quarter.

The initial planning stage remains the main issue for the capital’s housing goals. In total, 5,680 new homes began to be built in Q3, significantly behind the levels seen at the start of the year (9,550), but 14% higher quarter-on-quarter from Q2 – when only 4,970 new homes were started.

At the end of the housebuilding process, throughout Q3, 6,430 new homes were completed. This is the highest number in 2015 so far. By contrast Q1 2015 saw just 5,420 completions and was followed by Q2’s total of 5,370. Despite this marginal improvement, completion numbers are still significantly behind required levels – standing at an annualised rate of 25,720.

Andrew Bridges, managing director of Stirling Ackroyd, commented: “Approvals simply aren’t stacking up. No, No, No is being heard far too often and it can’t continue. A sustainable and realistic approach is needed in order to make sure new homes are being built – and London’s housing crisis tackled by the horns. The Chancellor may have seemed to initiate the first stage of changes in his Autumn Statement, but in reality it’s still an overwhelming task. And tackling London’s perilous planning departments is the first step.

“Better planning measures won’t be able to stem the tide of population growth in the capital, but they can alleviate London’s housing struggles. A generation of Londoners are facing the prospect of leaving London in order to achieve homeownership and avoid vicious cycles of high rent. Action needs to be taken in order to fix this and create more choices. Planning officials need to accept that the game has changed, no longer can councils afford to pick and choose. They must be both practical and pragmatic.

“Starts and completions may have picked up slightly towards the end of the year – but it’s a hollow victory. These levels aren’t enough to trigger a shake-up of London’s planning departments.”

Southern boroughs are coming closest to beating London’s housing problems. With the rest of the capital seeing an overall decrease, the south of London managed to beat this trend.

Southwark led the way, approving 912 homes, the highest number of any borough, and Croydon followed closely behind, approving 880 new homes overall during the quarter. In third place was southern Lambeth, which approved 586 new homes.

This marks significant progress on a quarter-on-quarter basis in the south of the capital. Southwark increased its number of approvals in Q3 by an impressive 1558% from only 55 new homes given permission in Q2. Lambeth similarly recorded a considerable increase in Q3, seeing a 293% rise from Q2, accompanied by a 196% increase in Croydon.

Between these three boroughs, approvals accounted for 41% of all permissions across Greater London in Q3.

Other regions in London have adopted a much stricter planning solution for the sanctioning new builds. Barking & Dagenham proved to be the worst borough for planning approvals, granting just seven across the third quarter of 2015, whereas Kensington & Chelsea granted permission for only eight new homes. Havering was the third worst, sanctioning only 20 new home applications.

In total, 15 London boroughs approved fewer homes than in Q2, and 17 granted more permissions for new homes than across the previous three month period.

Southern borough Merton recorded the highest proportional approval rate of 95%, closely followed by Southwark with 94% as the southern boroughs continued to dominate London’s new homes agenda in Q3. In third place, Richmond-upon-Thames approved 86% of new homes applications – despite these totalling a small number.

Haringey has seen the biggest turnaround in terms of the proportion of new homes approved. In Q3, the borough approved 80% of all new home applications, compared to a 27% average across Q2.

Kingston-upon-Thames and Waltham Forest have also improved their approval proportions in Q3 – by 44% and 50% respectively. This marks a significant quarter-on-quarter improvement from the 26% and 28% of new home applications granted permission in Q2 2015.

Despite this, outer London boroughs overall continue to lag behind the inner core.

Havering proved itself to be the least lenient London borough, allowing just over one in ten potential new homes (12%) in Q3 2015, falling significantly from the borough’s 73% average in Q2. Barking displayed a new resilient resistance to planning approvals, allowing just 15% of new home applications, compared to 82% in Q2 2015.

Andrew Bridges concluded: “Amid the disappointing direction approvals took towards the end of last year – there are small signs of encouragement. The south has proved it’s willing to allow a high proportion of new homes. And this enthusiasm is even spreading across the river. Haringey’s transformation in Q3 embodies what is needed in London – a new way of looking at the problem. New homes can be portrayed as the enemy on some occasions but more often than not, they aren’t the threat they are made out to be. They can be a beneficial and positive force in both communities, and across the capital.”