A chronic shortage of properties continues to drive house prices upwards across Britain. But a significant increase in the number of new homes granted should go some way to stopping prices spiralling ever upwards.
The HBF and Glenigan’s latest Housing Pipeline report shows that initial planning consent for 255,032 new homes was granted in England in 2015 – up 57% from a low point of 162,204 in 2009.
Permissions granted in Q4 2015 were up 13% on the corresponding quarter in 2014, to 74,759, as developers submitted more applications with a view to delivering further increases in housing supply.
The volume of planning consents have increased steadily every year since 2009, with actual housing supply also increasingly markedly over the past two years as more of the permissions are progressed to the point that infrastructure work can start and housebuilders can begin building much needed new homes.
In excess of 180,000 new residential properties were added to the housing stock in 2014/15 - up 22% on the previous year - as housebuilders increased output in response to the hike in demand for new homes.
Stewart Baseley (pictured), Executive Chairman of the Home Builders Federation (HBF), said: “The number of planning applications now being submitted demonstrates the commitment of the industry to deliver further increases in housing supply. The past two years have seen huge increases in house building levels, with housing supply in England surpassing 180,000 homes per year in 2014-15, up 22% on the previous year.”
But while the increase in the number of permissions, a strong indicator of future supply, is welcome, many still have to navigate the complexities of the planning system, according to Baseley.
He added: “This is a further sign that house builders continue to step up investment in future housing supply but we need to see these permissions being processed to the stage where we can get onto site and start building more quickly and really start to meet demand for housing.”
A major obstacle facing the housebuilding sector in recent years has been a shortage of labour. It is estimated that there is currently a backlog of almost 500,000 homes across England still waiting to be built despite receiving planning consent partly because of a construction skills shortage in the housebuilding industry.
But to help rectify the problem, the Construction Industry Training Board (CITB) and HBF last month announced plans to join forces to form a major new partnership to help tackle the housing skill needs.
Over 45,000 new homebuilding workers will be trained by 2019 to help tackle the nation’s housing shortage through the Home Building Skills Partnership – a £2.7m training scheme designed to help boost the supply of new build homes.
The shortage of skilled labour in the housebuilding sector is pushing up the price of hiring tradesmen, which in turn is having an impact on new build property prices.
The financial crash of 2007-08 bears some of the blame as it led to thousands of people leaving the construction industry. Now that demand has returned, there is a skills shortage, with bricklayers, carpenters and joiners in short supply.
Brian Berry (pictured), Chief Executive, Federation of Master Builders (FMB), said: “We’re already seeing housing developments starting to stall because the cost of hiring skilled tradespeople is threatening to make some sites simply unviable. Unless we see a massive uplift in apprenticeship training in our industry, there won’t be enough pairs of hands to deliver more housing on this scale.”
But the new partnership between CITB and HBF will support more than 3,500 construction businesses and, by 2019, train 45,000 new entrants and 1,000 experienced workers with new homebuilding training qualifications, which will hopefully create long-term skills solutions to meet the Government’s target of 1m new homes by 2020.
Housing and Planning Minister Brandon Lewis said: “The number of new homes is up 25% in the last year because the country is building again and delivering the homes the nation wants.
“That’s why the Home Building Skills Partnership is an important initiative and will help deliver the training of skilled workers we need to get the job done and to improve quality across the industry.
“Construction offers an exciting and rewarding career and we need to build a new generation of home grown talented, ambitious and highly skilled construction workers.”