BBC Business News today reported that the Home Builders Federation (HBF) had published figures that Planning permission was granted for 33,881 homes across England in July to September. The HBF reports that this is a 36% rise on the 24,872 approvals in the second quarter, and 17% higher than a year earlier but add that this is still less than the 60,000 approvals needed each quarter to meet demand.
Under the National Planning Policy Framework, issued in April 2012, local authorities are required to work out future housing needs in their area, and then allocate sufficient land to meet it – the aim of the government being to remove obstacles to the building of new houses, and to speed up planning decisions.
According to the BBC article Stewart Baseley, executive chairman of the HBF, said: “The increase is good news and hopefully a reflection of the positive planning principles of the new system. It is just one quarterly increase and we are still well short of the number needed but we hope it starts a trend that will continue in 2013. The new system must provide enough viable land to build the number of homes the country needs. Continuing the current low level of house-building is storing up huge social and economic problems for the years ahead and the shortfall must be addressed.”
Whether this trend will continue and we will finally see an longer term upswing in both granting of planning permission and, just as importantly, the translation of permissions in to actual built housing remains to be seen. Without increased supply then demand will continue unabated forcing prices still higher and driving more people out of the housing market.
It is simple economics – limited supply for a highly desired commodity leads to higher prices.