Property Development Funding News:- House builders are continuing to buy land with 370,000 planning permissions granted last year – more than double the number approved a decade ago.
The figure is the second highest annual total on record according to the House Builders Federation and Glenigan’s latest housing pipeline report.
HBF said the numbers reflected the sector’s commitment to increase housing delivery despite the fact permissions can still take months or years to realise.
Glenigan’s economics director, Allan Wilen, said: “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 reflects the sustained flow of projects with approval that is already under construction or progressing to site.”
Housing supply is up 78 per cent in the past five years with 222,000 homes added to the housing stock last year. Although, the total is still short of the government’s target of building 300,000 a year by the mid-2020s.
HBF executive chairman, Stewart Baseley, said: “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 today’s 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.”
Finance brokers Hank Zarihs Associates said the data reflected the increased level of demand from house builders for property development funding and construction loans.
Planning departments need more resources to speed up
He was critical of the time local authorities were taking to process permissions which delayed when builders could actually start on site. Baseley said the industry was keen to work with central and local government to ensure planning departments have enough resources to handle increase applications.
HBF said the industry’s ability to turn planning permissions into bricks and mortar was also reliant on economic stability, consumer confidence and an effectively functioning housing market generally.
“New homes sales numbers are at historically high levels but the sluggish second-hand market, and consumer uncertainty generally clearly pose a threat,” said Baseley.
The IHS Markit/CIPS Purchasing Managers’ Index showed output in April rising for the first time since January with residential work expanding at its fastest pace for four months. UK total building activity reached 50.5 up from March’s 49.7 level. Latest data revealed a solid expansion of residential work, with the rate of growth reaching its highest since December 2018. Survey respondents commented on resilient demand conditions and a strong flow of new buyers.