Housing delivery still growing, but much more needed in London and the south
The number of new homes being built across England increased to 232,000 during the year to Q3 2018. This growth marks a return to the rate of increase seen during 2013-16. It comes after a year of consistent delivery at a rate of just under 220,000 homes per annum. The total number of starts across England has levelled off over the last three quarters, suggesting this return to growth may be short-lived. All regions of England saw more housing delivery in the year to Q3 2018 than in the previous 12 months. Only London, the South East and the East are delivering fewer homes than needed at an aggregate level, as calculated by the standard calculation of housing need.
Even in the regions where housing supply meets need, there are individual local authorities with supply shortfalls. This is shown in our mapped estimate of how local authorities would perform against a Housing Delivery Test run for the three years to Q3 2018. Within this the greatest concern should be around those city regions where there is widespread failure of the Test – specifically London and its hinterland, and Greater Manchester.
The number of new planning consents remain well ahead of housebuilding, at over 350,000 in the year to Q2 2018. There is a fall in the number of new consents granted in the latest data, after a constant increase in new consents following the introduction of the National Planning Policy Framework (NPPF) in 2012. The number of new planning consents is far above housing need across all regions except London. This imbalance is part of the reason for the national lag in delivery versus consents.
Help to Buy remains a key driver of housing delivery as the number of loans continues to increase, supporting the delivery of 22% of all new homes in 2017/18. The scheme is now set to continue until 2023 albeit in a more restricted form after 2021. There is currently a substantial pipeline of Build to Rent housing under construction and the number of starts appears to have stabilised over the last two years at a rate of around 19,000 new starts per year. Affordable housing delivery looks set to slightly increase in 2017/18 with the growth driven by shared ownership, according to the latest forward indicator of supply from the NHF.