Rewriting development rulesby Daniel Bentley / July 8, 2016 / Leave a comment
Everything has changed in the aftermath of the Brexit vote and in housing, where stakes are high and confidence counts for so much, the apprehension is running deep. Housebuilders’ shares have taken a battering in anticipation of the trouble ahead. Given the exorbitant cost of housing measured against incomes in 2016, a fall in prices should be welcome. But it will need to be accompanied by a strategy for maintaining—and increasing—housebuilding output which will otherwise go into decline.
This is especially critical given that completions—155,000 in 2014/15—already lag well behind the circa 250,000 new homes that are needed each year just to keep up with household formation. This shortfall cannot so easily be blamed on a shortage of developable land anymore. Planning permissions are being granted in ever greater numbers and, for 2015, reached 261,644. The latest update for the Home Builders Federation showed that in the first quarter of 2016 they continued to grow year-on-year. The trouble is the painfully slow rate of development. There is always going to be a lag between that initial permission and completion, but permissioned units have been increasing more rapidly than completions since 2011.