The whole planning approval process has recently come under scrutiny. The latest report conducted by the Home Builders Federation has highlighted the bureaucratic inefficiencies that have persistently slowed down property construction. Considering demand continues to rise across the UK, these inefficiencies are causing significant disruption in securing the development of well-needed properties.
Time is now ticking for the Government, keen on securing the development of 1.5 million properties by the end of the parliamentary term, to address these institutional problems.
What Does the Data Show?
According to the latest Housing Pipeline Report, the volume of construction approvals in 2024 stood at 242,610 units. To put this in its broader context, this is the lowest recorded volume of approvals since 2014. It represents a 26% drop in approvals from the 2019 high point, which amounts to a loss of 85,000 annual approvals.
In another sign of the systemic issues plaguing the planning approval process, only 9,776 development sites have received permission for construction. This is the lowest total recorded volume since 2006. Compared to 5,149 sites being approved in July 2018, only 2,261 were approved in July 2024.
Viewed from a regional perspective, planning approvals have decreased by –16% in the East Midlands, -14% in London, and –11% in the West Midlands, though the North West saw a respectable increase of 25%.
A microcosm of these issues can be seen in Sigma Homes’ latest decision to scale back the number of construction projects due to the inefficiencies of the planning approval process. One project, for example, took over 15 months to receive approval, even though the development project was located within an allocated site.
Explaining why Sigma Homes’ shareholders elected to pivot away from construction, Geoff Potton, chief executive of Sigma Homes, said that ‘the last few years have been exceptionally difficult for SME housebuilders. While we have successfully delivered 20 developments, the mounting challenges – particularly in planning, regulatory controls, and utilities infrastructure – have made the development process increasingly unviable.’
Another example is the current hold-up of 160,000 properties across 74 local authorities next to rivers containing high amounts of nutrients, despite the proposed properties having a negligible impact on the nutrients in those regions. As a result, the current state of planning approval is discouraging construction agencies from investing in the market.
S&P Global Purchasing Managers’ Index observes that the UK construction industry fell for the fifth month in February to 44.6, the lowest in almost five years. Concurrent with this trend is the decline in residential buildings during the same period to 39.3. In turn, the inefficiencies of the planning approval process are directly impacting the productivity of property construction. Investment confidence is also declining.
What Can Be Done?
As the House Pipeline Report emphasises, if the Government wants to reach its 1.5 million property goal, around 370,000 units per year, then planning approvals must rise by 53%. This is an important task for the Government, not least as one of its major parliamentary objectives is to turbocharge all stages of the planning approval process.
Neil Jefferson, chief executive of the HBF, argues that ‘the latest planning figures show that housing supply in the short and medium terms is at critical crisis levels,’ adding that ‘planning permissions and house building levels are falling and companies do not have the confidence to invest with SMEs in particular struggling and a growing number unable to continue to operate.’
Responding to these criticisms towards the Government, the recently introduced Planning and Infrastructure Bill promises to ‘unleash seismic reforms’ across the planning approval process. One such provision is to streamline how planning applications are assessed by officers and committees as a way to shave the average waiting times for planning approval.
Councillor Richard Clewer put forward a statement arguing that ‘the Planning and Infrastructure Bill is an important step in the re-introduction of strategic planning. Its return is long overdue and if implemented effectively and correctly, strategic planning will help deliver more homes. It will allow areas to pinpoint the right homes in the right places and will enable councils and their partners to plan more effectively for infrastructure in order to make development sustainable.’
Why is Addressing Planning Approvals So Important?
Ultimately, the current planning approval system is failing to address the needs of the market. It is widely acknowledged that the current planning approval system is irritatingly slow and cumbersome. Because of these systemic problems, it is deterring construction agencies from wanting to invest in property development. Agencies that do invest, however, are often confronted by needless delays and long waiting times. Inefficiency, therefore, characterises the current planning approval system.
As such, it is important for the Government to meaningfully address these issues to assist construction agencies in locking down development projects.
