Turning around the sharp decline in UK planning consents is key if the government is to hit its target of building 1.5 million homes over the next five years, says Savills.
The annual number of consents in England has been falling since its 2019 peak with consents last year 30% lower than four years ago at around 214,000, says a report by the property agent led by associate director residential research & consultancy Hamish Simmie.
“The reduction in the number of consents since peak could be partly attributed to sites taking longer to progress through the pipeline compared to previous years, in part driven by the increasing average size and complexity of development sites,” says Simmie.
The study points out that sites with up to 250 units are more likely to involve just one landowner and in general require less infrastructure.
Increased volumes of smaller sites can also provide “an opportunity for a range of developer types” to build out sites.
As a result, sites of up to 250 units progress through the planning pipeline at a faster rate compared to larger sites, Simmie adds.
He says: “A focus on delivering an increased number of smaller sites is vital to be able to achieve the 1.5 million homes by 2030 target.”
The housing pipeline
The Savills’ report goes on to lay out the state of the housebuilding pipeline in England, which it says is “essential for shaping effective interventions” to build homes at a rate of 300,000 a year.
It says there are almost 2.9 million homes spread over just under 13,400 sites in the immediate planning pipeline in England.
The largest number of sites are at the later stages of the pipeline, and about 6,500 sites “have either a full application submitted, or full permission granted”.
The total number of homes held at these planning stages is equivalent to 3.5 years of new home delivery in England, the report says.
There are higher volumes of homes coming through at the earlier stages of the planning pipeline.
However, with an average site size of 216 homes, sites in the earlier stages of the pipeline are typically three times larger than the sites in the later stages.
This means that the 1.26 million homes with either an outline application submitted or outline planning granted in England are split across just over 3,000 sites.
Who owns what
Simmie says: “Large housebuilders are active across the entire planning pipeline, but they mostly operate across sites that are well progressed through planning, being involved in nearly half of all homes on sites currently under construction.”
The top three firms with involvement in the most homes are Taylor Wimpey, Barratt and Persimmon.
At the mid-point of this year, this trio of public company housebuilders were involved in approximately 329,500 homes.
They have an average annual new home delivery of around 43,700 homes over the past three years, the homes with full planning consent across these firms equates to two years of delivery.
Housing Associations also have most of their construction work concentrated in shorter-term opportunities, with 73,000 homes under construction as of the first half of this year, equal to 9% of total homes at that stage.
The study says other private housebuilding includes individuals and “private companies not necessarily involved in the construction sector”.
This disparate group holds second place in being involved in the highest number of homes in the pipeline in England, with around 319,200 homes.
This group are most active in the early stages of the planning pipeline, with 50% of their homes at the “outline application, or outline permission” stages.
The public sector, which holds nearly 316,900 homes in the immediate pipeline, also has 50% of its homes in the early stages of the planning pipeline.
Homes England is involved in the largest volume of homes in the public sector, with approximately 60,200 homes in the immediate pipeline.
Nine out of ten homes with Homes England involvement are in the early stages of the planning pipeline.
Simmie points out: “Support from local planning authorities on these smaller sites at the earlier stages through to construction would significantly support the delivery of 1.5 million homes by 2030.”
Earlier this month, Homes England appointed Eamonn Boylan as interim chief executive.
This followed the announcement two weeks before that chair Peter Freeman and chief executive Peter Denton would leave the regeneration agency following a letter by housing minister Matthew Pennycook, which set demanding targets for the body over the next five years.
