The Home Builders Federation (HBF) has released concerning data in its latest Housing Pipeline Report. This report highlights a 2% quarter-on-quarter drop in planning permission levels for new homes in the third quarter (Q3) of 2023, totaling just 2,778. The situation appears even more dire when considering the year-on-year figures. The first nine months of 2023 saw an 18% decline in approved projects compared to the same period last year.
Substantial Reduction in Housing Units
In Q3 of 2023 alone, 61,221 housing units received approval, marking an 8% decrease from the previous quarter and a significant 21% drop from the same period in the previous year. The first nine months of 2023 witnessed a concerning 18% decrease in consent for new homes, with only 198,121 units approved.
Majority in Large-Scale Developments
An overwhelming 91% of the approved schemes in Q3 2023 were large-scale residential property developments, comprising 10 or more units. However, these too experienced an 8% quarterly decrease, with only 55,510 units approved – 21% lower than the previous year.
Smaller Projects Also Affected
The remaining approved units were part of smaller new-build projects, including self-build schemes, homes within non-residential projects, and conversions of non-residential properties. The private sector saw a notable 8% quarterly decrease in housing projects with three or more units, a 21% fall year-on-year.
Social Housing in Crisis
The social housing sector is not immune to this downturn. Q3 2023 saw a 16% decrease in approved social housing projects with three or more units, marking a staggering 44% decline compared to 2022.
Regional Variations
The report indicates varied trends across regions. The North West, Yorkshire and the Humber, and Scotland experienced increases in unit approvals. However, the North East, East of England, London, and Wales recorded significant declines. Scotland and Yorkshire and the Humber were the only regions with a year-on-year increase in housing unit approvals.
England’s Dismal Outlook
England, in particular, is heading towards a nine-year low in housing supply. The number of projects approved in Q3 2023 was the lowest since 2006, with a 19% decline compared to 2022. This trend, if continued, could lead to housing supply in 2024 dropping below 200,000 units annually, the lowest since 2014.
Industry Leaders Raise Alarm
Stewart Baseley, Executive Chairman of the HBF, has expressed grave concerns over this trend. He attributes the decline to several years of anti-growth policies and warns of the severe impacts on the housing market. Baseley emphasises that the government’s current approach to planning, which includes removing local housing needs assessments and allowing councils to plan for fewer homes, will exacerbate the crisis. He cautions that prioritising politics over addressing the housing shortage will have dire long-term consequences for the economy and society.
Conclusion
The data from the HBF paints a grim picture of the UK’s housing market, with a clear trend of declining approvals for new homes. This situation poses a significant challenge to addressing the country’s housing crisis and raises questions about the future availability and affordability of homes for UK residents. The industry’s call for a reevaluation of current policies and practices is a stark reminder of the urgent need for effective solutions to ensure a stable and accessible housing market.