Residential planning applications fall for fifth consecutive year

Despite a year-on-year climb in the number of residential planning applications being granted approval, for the fifth consecutive year, the total number of applications has fallen, according to newly released data from Sirius Property Finance.

Related topics:  Property,  Planning
Property | Reporter
4th April 2023
"A fifth consecutive dip in residential planning application volumes is certainly cause for concern"

A new analysis of Gov data on the number of planning applications both being made and granted and how this level of construction market activity differs between the residential and commercial sectors was carried out by the firm and revealed that 51,228 major and minor residential planning applications were made in the last year (2021/22).

This annual total marked a further -2.7% decline on the notable -10.8% drop seen the previous year, marking the fifth consecutive year that residential planning applications have declined since their peak of 50,227 in 2016/17.

However, the good news is that 37,956 of the applications made in 2021/22 were granted permission, equating to 74.1% of total applications made, the highest level of applications granted since 2018/19.

It’s an altogether different story across the commercial sector, where 8,646 total and minor commercial planning applications were made in 2021/22. This total marked a 9.7% bounce on the previous year and reversed the year-on-year downward trend seen over the previous six years.

While 89.9% of all applications were granted permission, this is the lowest success rate seen since 2010/11. However, the 7,776 permissions granted did equate to an actual increase of 687 versus the previous year.

In terms of the breakdown of applications made across both sectors, householder developments have driven planning application activity over the last year, accounting for 57.3% of all applications made.

Those listed as ‘other’ accounted for 14%, while residential dwellings also made up a significant proportion of planning applications at 12.4%.

The alteration or extension of listed buildings (6.7%) and change of use (4%) also ranked within the top five.

Nicholas Christofi, Managing Director of Sirius Property Finance, commented: “A fifth consecutive dip in residential planning application volumes is certainly cause for concern given the fact that we simply aren’t building enough homes to satisfy demand.

"This consistent decline is exactly why we were hoping to see the government announce some form of house-building initiative in the recent spring statement, but with this failing to materialise, we could well see a sixth consecutive year-on-year decline come the end of this financial year.

"One silver lining is certainly the uplift in commercial sector activity. While the commercial sector was hit far harder by pandemic restrictions, the decline in planning activity had been apparent for some years prior to the Covid outbreak.

"So it’s reassuring to see that the appetite for commercial development has increased year on year, as has the number of applications being granted, even if the residential sector continues to be the driving force where the volume of applications is concerned.”

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