Homes growth slows as Local Plan deadline looms

By Daniel Fryd, Senior Consultant

The growth in the number of new homes in England has slowed significantly despite more than 222,000 homes being built in England last year.

MHCLG statistics released earlier this month showed new home completions at their highest rate for 10 years, but the rate of growth has fallen to 2%, compared to a 15% rise in 2016.

The statistics also showed the number of new affordable homes increasing, while new homes provided through Permitted Development Rights have fallen considerably.

While the latest figures have been heralded as a success by Communities Secretary James Brokenshire MP, there is clearly still a long way to go before the target of 300,000 new homes a year by the mid-2020s can be reached.

At the current rate, it will be 2034 before the Government hits its ambition of 300,000 new homes a year.

New builds, not office-to-resi

New build completions were up 6% on last year, with the number of homes provided through Permitted Development Rights (PDR) down by a whopping 28%.

While new rules in the NPPF made it easier for PDR to be implemented to convert buildings to residential, use has predictably clustered around major cities and in the home counties where there is high demand.

Applications for office to residential conversions have steadily dropped over the last year, largely down to a decline in the availability of office buildings which are appropriate for conversion to housing.

PDR will continue to play an important role in providing housing in areas of high demand, but it is clear it is not a long-term solution and that new build rates will have to increase further as the number of suitable office buildings falls.

Affordable homes

There was also good news for the Government and first-time buyers as statistics showed the number of new affordable homes rose by 12% to 47,355.

Affordable rent has become the most common tenure type for affordable homes, with a total of 26,838 new affordable rent homes – 57% of the overall number of affordable homes.

The effect of the Government’s much-celebrated policy to remove the HRA borrowing cap, announced in Budget earlier this year, is likely to bear over the coming years with a further increase in affordable home delivery.

Local Plans and Delivery Tests

With a deadline of 24th January 2019 for councils to submit Local Plans or face the new NPPF rules and their revised housing figures, we are seeing a flurry of activity. This is expected to continue in the coming months as developers look to start work on approved sites.

The result of MHCLG’s Housing Delivery Test, set to be released in the very near future, are also expected to move things along, as the list of the worst performing local authorities who need to step up their building rates the most are released.

The test will look at the construction of homes over three-years against the assessed need for new homes, with the worst performing councils potentially facing having their plans declared out of date by the Government.

We await the test results with bated breath.