London’s housing pipeline cracks as nearly half of new homes aren’t built

Much needed new homes in London are not being built with a new analysis showing that 46% of those given planning permission in 2017 were not started.

There has been a year on year increase in planning applications, reaching a record of almost 80,000 last year but this is not translating into new homes actually being built, according to a report from London First and independent assurance, tax and advisory firm Grant Thornton UK.

It also shows that in 2014 some 54,941 homes were given planning permission but three years later, the point at which planning permission typically runs out, only 29,701 were under construction or completed.

Only 3,000 homes were built in the suburbs of London despite them making up more than half of the land available, the analysis also shows.

The Mayor’s new housing target states that London has to build 66,000 new homes each year to meet its growing need and put right years of underinvestment, but the capital seems able to only build a fraction of these: completing just 26,458 in 2017.

The housing shortfall is leading to spiralling costs and forcing thousands of Londoners out of the capital, the research suggests.

A breakdown shows that while the nearly 80,000 applications in 2017 was a 14% increase on 2016 and more than double the number of applications in 2010, the number of homes given planning permission continues to fall, from 54,941 in 2014 to just 48,024 in 2017.

However, the number of affordable homes has seen a welcome increase with 14,372 given the go ahead in 2017, making up 30% of permissions and almost twice the number seen in 2010. Looking at completions, 7,510 affordable homes were built in 2017, up from 2,379 in 2010 but still far short of what the capital needs.

‘Every year tens of thousands of new homes fall by the wayside, and the ongoing slide in planning permissions will only make things worse. London’s housing pipeline appears to be cracked and, unless we get to grips with the house building hold ups, generations of Londoners will be priced out of a place to call home,’ said Jasmine Whitbread, chief executive of London First.

‘With outer London building just 3,000 homes in 2017, barely a tenth of the new homes brought to the capital, the Mayor must get serious about holding these boroughs to account. To tackle London’s housing crisis, boroughs must free up more land, Government must enable more investment and developers must start building the homes we need,’ she pointed out.

London’s outer boroughs continue to lag behind in house building with just 1,029 new homes built in TfL zone five in 2017, compared with 10,106 in zone two. London’s outer boroughs make up more than half of London’s land but, in total, built just 3,278 new homes in 2017, compared with 12,943 homes built in central London.

The Mayor has promised to boost building in the outer boroughs with plans to build more than 250,000 new homes in the capital’s 13 outer boroughs, more than double the current rate. The draft London Plan, published for consultation last year, proposes a new approach to housing density to help boost the number of homes built near town centres and transport hubs and encourage building on small sites, such as in-fill opportunities, garages and available plots of land.

However, the research shows just how big the gap is between planning and actual construction. ‘We are still falling seriously short of the level of house building needed to combat the ongoing housing crisis. Permission rates for applications in London have fallen for the fourth consecutive year while the increase in completions has been marginal,’ said Ian Tasker, director of government and infrastructure advisory at Grant Thornton.

‘With the Mayor’s target now set at 66,000 homes, we simply do not have enough permissions in the pipeline to reach this number. Without dramatic change and more direct intervention to find out why we are failing to substantially increase this output, this target is not going to be achieved. We need to address this now,’ he explained.

‘To stand a chance of effectively tackling this problem we need to make better use of land and increase housing density. Even London’s densest boroughs have low densities compared to cities such as Paris and Madrid. Our research has found that an area’s housing supply was significantly boosted by investment into transport infrastructure and to encourage further housebuilding we need to see this type of investment prioritised across London,’ he added.


Written by: Houseladder