Residential development continues to slow down
The Government recently announced a series of changes to the planning system in the hope of boosting housebuilding, but the latest figures highlight the challenges ahead. 229,700 new homes were completed in the twelve months to June 2024, according to the latest Energy Performance Certificate (EPC) data. The supply of new homes has been essentially static at around 230,000 since the end of 2023.
Residential development generally continues to decline. The ONS construction output measure sank to more than 15% below 2019’s level in May 2024. More alarmingly still, starts are falling rapidly. Annualised starts have more than halved in a year, falling 55% between Q2 2023 and Q2 2024 according to the National House-Building Council (NHBC).
Consents trend downwards, threating future supply
If housebuilding is to take off under the new Government, a substantial increase in the number of planning permissions will be needed. Only c. 235,000 new homes gained full planning consent in the twelve months to June 2024, according to estimates from Glenigan and the Home Builders Federation (HBF).
The gap between consents and delivery remains razor-thin, with slightly more homes gaining consent than were built over the last twelve months. In practice, the situation is likely worse: around 10% to 20% of consented homes typically fail to be built. This means the effective pipeline of consented homes is below the current level of housebuilding, and a fall in supply in the immediate future is likely.