London’s housing pipeline cracks as nearly half of new homes aren’t built
- In 2017, 46% of new homes given planning permission fell by the wayside
- Only 3,000 homes were built in London’s suburbs, despite making up more than half of London’s land
- Year on year increases in planning applications – reaching a record of nearly 80,000 in 2017 – fail to lead to new front doors opening
Nearly half of new homes (46%) given planning permission in the capital are not being built, according to new analysis from London First and Grant Thornton UK LLP.
In 2014, 54,941 homes were given planning permission but, three years later - the point at which planning permission typically runs out- only 29,701 were under construction or completed.
The 46% “attrition rate” is a dramatic increase from 33% in 2016.
The Mayor’s new housing target states that London has to build 66,000 new homes each year to meet its growing need and put right years of underinvestment, but the capital seems able to only build a fraction of these: completing just 26,458 in 20171. The housing shortfall is leading to spiralling costs and forcing thousands of Londoners out of the capital2.
There is an appetite to build, with a record number of planning applications in 2017: nearly 80,000, a 14% increase on 2016 and more than double the number of applications in 2010. But the number of homes given planning permission continues to fall, from 54,941 in 2014 to just 48,024 in 2017.
Increase in affordable homes
The number of affordable homes has seen a welcome increase with 14,372 given the go ahead in 2017, making up 30% of permissions and almost twice the number seen in 2010. Looking at completions, 7,510 affordable homes were built in 2017, up from 2,379 in 2010 but still far short of what the capital needs.
Releasing the data at Building London Week, Jasmine Whitbread, chief executive of London First, said: “Every year tens of thousands of new homes fall by the wayside, and the ongoing slide in planning permissions will only make things worse. London’s housing pipeline appears to be cracked and, unless we get to grips with the housebuilding hold ups, generations of Londoners will be priced out of a place to call home.
“With outer London building just 3,000 homes in 2017, barely a tenth of the new homes brought to the capital, the Mayor must get serious about holding these boroughs to account. To tackle London’s housing crisis, boroughs must free up more land, government must enable more investment and developers must start building the homes we need.”
Outer boroughs failing to build new homes
London’s outer boroughs continue to lag behind in housebuilding, with just 1,029 new homes built in TfL zone 5 in 2017, compared with 10,106 in zone 2. London’s outer boroughs make up more than half of London’s land but, in total, built just 3,278 new homes in 2017, compared with 12,943 homes built in central London3.
The Mayor has promised to boost building in the outer boroughs with plans to build more than 250,000 new homes in the capital’s 13 outer boroughs, more than double the current rate. The draft London Plan, published for consultation last year, proposes a new approach to housing density to help boost the number of homes built near town centres and transport hubs and encourage building on small sites, such as in-fill opportunities, garages and available plots of land.
Ian Tasker, Director, Government and Infrastructure Advisory, Grant Thornton UK LLP, commented: “We are still falling seriously short of the level of housebuilding needed to combat the ongoing housing crisis. Permission rates for applications in London have fallen for the fourth consecutive year while the increase in completions has been marginal. With the Mayor’s target now set at 66,000 homes, we simply do not have enough permissions in the pipeline to reach this number. Without dramatic change and more direct intervention to find out why we are failing to substantially increase this output, this target is not going to be achieved; we need to address this now.
“To stand a chance of effectively tackling this problem we need to make better use of land and increase housing density; even London’s densest boroughs have low densities compared to cities such as Paris and Madrid. Our research has found that an area’s housing supply was significantly boosted by investment into transport infrastructure and to encourage further housebuilding we need to see this type of investment prioritised across London.”
- Analysis of new build developments of 10 homes and more. Excludes homes developed under permitted development rights – conversions from commercial or other use – that are not required to go through the planning system.
- Net departures to places outside London totalled 93,000 in the year to mid-2016, up more than 80% from five years earlier. Savills data, reported by the FT (‘House prices drive London exodus as buyers seek better value’, 24 July 2017).
- Outer London is defined as TfL zones 5 and 6. Central London as TfL zones 1 and 2.
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