1. Governance
January 8, 2016

“According to the LGA, my flat doesn’t exist”: Does Britain really have 475,000 unbuilt homes?

By Duncan Stott

The British public have cottoned on that we have a bit of a problem building enough homes – one which has contributed to the outrageous housing costs hitting younger workers across most of the country. Everything that ever gets built in Britain needs planning permission, so more and more people have naturally been pointing fingers at planning for causing our growing housing shortages.

But planning is run by local government, and the Local Government Association is having none of it. It’s adamant that it is the dastardly developers who aren’t building the homes that they graciously been given planning permission to deliver.

It is always nice to have a big, eye-catching number when you make an argument like this, and the LGA have one: they reckon that there 475,000 un-built homes with planning permission in England and Wales. “These figures conclusively prove that the planning system is not a barrier to house building,” the LGA triumphantly exclaimed.

Well that’s that then, isn’t it? I’ll meet you with my pitchfork in front of the Home Builders’ Federation.

But hang on a second. Let’s just take a closer look at this figure. To get to 475,000 unbuilt homes, the LGA have looked at every development scheme that has permission, and decided that, until the scheme is completed, the whole development should be classed as unimplemented – even if most of the houses are mid-construction, or even if they have been finished.

If you count houses that have been built as unbuilt, you are obviously going to end up seriously exaggerating from reality. I am writing this article from a flat that was finished 18 months ago; but another part of the development is still being built. According to these figures, I live in an unbuilt home.

Another study has also looked at the issue of unbuilt homes with planning permission issue. The Labour Party-commissioned Lyons Review analysed the same source data, but took into account whether or not construction was actually taking place. It came up with a very different number: just 130,000 planned homes were genuinely stalled or on hold. Of course we need action to get stalled homes built – but we also need to be clear about the extent of the problem.

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Still, maybe developers could be doing more to build faster, and it is certainly true that the pipeline from permission to completion is growing. But when we need to be building 300,000 homes per year to make in-roads into our housing shortage, at the rate we ought to be building, a pipeline of 475,000 would only be 19 months of land supply.

So the figure is dodgy, and might not be as big as it sounds. But are we even looking at the most important figure to begin with? Surely the key point isn’t how long the development pipeline is, but how much is going through the pipe to begin with.

To get more houses completed, we need our councils to be granting enough planning permission to begin with, especially in the areas where housing costs are the most unaffordable. That means setting ambitious housing targets in their local plans so that more land is opened up for homes and can have planning permission granted.

Yet too often councils are criticised by the Planning Inspectorate for under-baking their housing targets. And while the LGA’s raw figures show 212,000 planning permissions were issued last year, we should adjust that for permissions which have vanished due to expiry, or reapplications on the same site.

Do that, and the true figure is actually 169,000 new permissions genuinely entering the pipeline. We are a long way away from our councils planning for the 300,000 homes per year we need.

So much the idea that planning isn’t the problem. If we are to avoid the housing crisis from getting any worse, then instead of deflecting attention away from themselves, we need local government to step up to the mark to build the homes we need.

Thanks to Joe Sarling and Neal Hudson for their assistance with the analysis contained in this article.

Duncan Stott is director of the affordable housing campaign Priced Out.

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