House builders are
continuing to invest in land and getting new sites approved despite the wider
political and economic uncertainty HBF/Glenigan’s latest Housing Pipeline
report shows.
Builders had a form
of planning permission granted for nearly 370,000 new homes in 2018, the second
highest annual total on record and well over double the number being granted a
decade ago.
Whilst many of the
permissions will still take months or years to navigate the remainder of the
planning process, the numbers underline the commitment of the industry to
deliver further increases in housing supply in the years ahead.
Housing supply is up
78% in the past 5 years with 222,000 homes added to the housing stock last
year. Whilst the level of increase is unprecedented, the total is still some
way short of the number of homes the country needs to be building. To address
the shortfall, government has set the industry a challenging target of building
300,000 a year by the mid 2020s.
The industry has
invested massively in recruitment and training in recent years to ensure it can
build both the volume and quality of homes the country needs. The latest
industry customer satisfaction survey figures show that whilst volumes continue
to grow, quality and satisfaction levels are also now increasing.
The numbers released
in the report count permissions that will, in the main, be built out over the
next two to five years. Whilst they suggest further increases in supply will be
delivered some uncertainties remain.
It is still taking
far too long for permissions to be processed by local authorities to the point
where builders can actually start on site. The industry is keen to work with
central and local government to ensure that local authority planning departments
have sufficient resources to deal with the increased level of applications
being submitted.
The industry’s
ability to turn planning permissions into bricks and mortar is also reliant on
a level of economic stability, consumer confidence and an effectively
functioning housing market generally. Unlike the second hand market, new homes
sales numbers are at historically high levels but the sluggish second hand
market, and consumer uncertainty generally clearly pose a threat.
Stewart Baseley,
executive chairman at HBF said the report shows that despite the wider
political and economic uncertainties, builders are maintaining record levels of
investment.
"The industry
is investing massively in people and land to ensure it can meet the challenge
set by Government to deliver even more, high quality homes," he continued.
“Last year saw
output continue to increase alongside improved customer satisfaction levels.
Builders are acutely focussed on delivering further improvements in quality and
service levels alongside investing in more land to enable further increase in
supply.
“The industry
continues to work with central and local Government to ensure local planning
departments have the capacity to deal effectively with the increased number of
applications. It is also pushing Government for confirmation that it will have
ongoing access to skilled labour from abroad post Brexit, which will be key to
its ability to build out these sites.”
Glenigan’s Economics
Director, Allan Wilen, commented, “The development pipeline remains strong,
with the number of units securing approval last year close to the record level
seen in 2017. The high level of approvals over the last two years is reflect
the sustained flow of projects with approval that are already under
construction or progressing to site.”
