London new home aims 'out of reach' as approvals drop 29%

London approved just 5,740 new homes across Q3 in 2015 - down almost a third (29%) from Q2 levels, and 52% from the annualised rate of 47,460 approvals granted in Q1, according to Stirling Ackroyd.

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Rozi Jones
15th January 2016
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This gives an annualised rate of 22,950 approvals, meaning the 42,000 yearly figure required to meet the latest government housing targets has stretched further out of reach.

In absolute terms there were 8,280 applications for new London homes in Q3 2015, with 5,740 granted permission. This equates to an approval rate of 69% across the capital’s 32 boroughs – more stringent than the 76% of new homes approved during the previous quarter. Even if all applications had been granted, giving an annualised approval rate of 33,120, London would still fall significantly short of necessary levels.

The initial planning stage remains the primary obstacle holding back the capital’s housing aspirations. In total, 5,680 new homes began to be built in Q3, significantly behind the levels seen at the start of the year (9,550), but 14% higher quarter-on-quarter from Q2 – when only 4,970 new homes were started.

Andrew Bridges, managing director of Stirling Ackroyd, commented:

“Approvals simply aren’t stacking up. No, No, No is being heard far too often and it can’t continue. A sustainable and realistic approach is needed in order to make sure new homes are being built – and London’s housing crisis tackled by the horns. The Chancellor may have seemed to initiate the first stage of changes in his Autumn Statement, but in reality it’s still an overwhelming task. And tackling London’s perilous planning departments is the first step.

“Better planning measures won’t be able to stem the tide of population growth in the capital, but they can alleviate London’s housing struggles. A generation of Londoners are facing the prospect of leaving London in order to achieve homeownership and avoid vicious cycles of high rent. Action needs to be taken in order to fix this and create more choices. Planning officials need to accept that the game has changed, no longer can councils afford to pick and choose. They must be both practical and pragmatic.

“Starts and completions may have picked up slightly towards the end of the year – but it’s a hollow victory. These levels aren’t enough to trigger a shake-up of London’s planning departments.”

While the rest of the capital saw an overall decrease, the south of London defied this trend. Southwark led the way, approving 912 homes – the highest number of any borough. Croydon followed closely behind, approving 880 new homes overall during the quarter.

In third place, southern Lambeth approved 586 new homes – creating a triangle of favourable planning outcomes.

Between these three boroughs, approvals accounted for 41% of all permissions across Greater London in Q3.

Andrew Bridges continued:

“It’s about time the south of the river led the way in the housing stakes. Southwark is brimming with housing potential. The Chaucer area is the crucible of potential according to our New Build Bible, particularly for high-capacity residential developments.  It’s exciting to see the councils in these development hotspots beginning to embrace new projects and prioritise the building of new homes.

“Driving this planning burst in southern London are substantial multi-dwelling towers, providing the maximum density of accommodation per available space. They may take longer to build, and longer to approve, but can quickly relieve housing pressures within areas once completed.

“It’s not just Southwark that’s benefitting from a more receptive planning atmosphere. Lambeth and Croydon have rebounded as developer havens. This are the first steps in dispelling the myth that London has no room for new homes. In fact, the capital is crying out for more homes – and they can be realised. We have identified space for half a million new homes in London and it’s up to the capital’s boroughs with the most local potential to deliver.

“Amid the disappointing direction approvals took towards the end of last year – there are small signs of encouragement. The south has proved it’s willing to allow a high proportion of new homes. And this enthusiasm is even spreading across the river. Haringey’s transformation in Q3 embodies what is needed in London – a new way of looking at the problem. New homes can be portrayed as the enemy on some occasions but more often than not, they aren’t the threat they are made out to be. They can be a beneficial and positive force in both communities, and across the capital.”

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