London’s planning system is allowing new homes at an annualised rate of just 27,470 as of Q4 2014 – or just over two thirds (69%) the political target for 40,000 finished new homes each year – an objective announced by George Osborne and Boris Johnson in February and underlined in March’s Budget, ahead of May’s General Election.
Analysis of planning applications across all of the capital’s 32 boroughs plus the City of London shows just 6,780 homes were given planning permission last quarter, spread across 826 different sites. These approvals represent 80% of all potential homes receiving a planning decision in Q4 2014. This is out of plans for 8,632 possible homes in Q4. By contrast, if 100% had been approved, this could have allowed an annualised rate of up to 34,530 new homes, or 86% of the official target rate.
In reality the number of homes reaching completion stage currently stands at an annualised rate of just 18,440 – after Q4 saw just 4,610 properties finished in the space of three months.
Despite this low base, London has seen an acceleration in finished homes. Last quarter’s figure represents a 30% increase from the previous quarter (Q3 2014). This is almost twice the acceleration in home completions seen outside the capital – across the rest of England there was a 17% uptick.
However, new home starts were far lower last quarter, at just 3,040 – or an annualised rate of just 12,160 homes per year. If this pace of housing starts continues and is reflected in the annual rate of completed homes it would mean failing to reach even one-third of the government’s annual target.
Andrew Bridges, managing director of Stirling Ackroyd, comments, “For culture, opportunities and sheer scale London now rivals any global megacity. But our capital must not become a victim of its own success – which means homes for everyone who can contribute to this city’s vibrant future. Homes have proved an excellent investment over previous decades, and today’s new Londoners demand the same opportunity. Planning must keep up.”
In London’s nine Conservative-controlled borough councils, 82% of homes were given planning permission in the last quarter of 2014. Close behind, the capital’s twenty Labour Party-controlled boroughs approved 78% of homes.
Meanwhile in the two Liberal Democrat councils just under three quarters (74%) of potential homes were allowed, while in boroughs without any overall control only 64% of homes received the go-ahead.
Andrew Bridges concludes, “Homes are an emotive topic, and a lack of them will be the most electrifying political issue of this decade. Politicians everywhere should take heed – but most of all in London.
The comparative weakness of boroughs without any overall control is one sign we need more decisive action. An overall plan for London needs cross-party agreement, and must be put into practice at a local level by every Borough Council. We need hundreds of thousands of extra homes – and that will take political courage.
Most vitally, London needs more developers submitting imaginative proposals in the first place. Local government, the London Assembly and the national government have a responsibility to encourage new building and seize the housing dilemma by the horns. There’s plenty of space and more than enough demand – so realistic, costed and scaleable policies can provide the homes demanded by millions of people.”
