The UK housebuilding sector has yet again experienced a significant setback due to declining planning approvals, with activity falling to its lowest level in over a decade. Government data revealed that just 898 major residential projects were approved between April and June this year, down 11 percent on the same period in the previous year, marking the first time the quarterly figure has dropped below 1,000 since 2012. Developers have long expressed their concerns about how the state of Britain’s planning system is contributing to the housing crisis.
Clive Holland, broadcaster on Fix Radio – the UK’s only national radio station for builders – has suggested what the UK could do to meet homebuilding targets, from a point of view of the building trades.
The planning system crisis, Clive Holland suggests, has been further exacerbated by policy uncertainty created by failed attempts at planning reforms. The Royal Town Planning Institute revealed that three-fifths of town planners told the Institute about the lack of resource in place to deliver the government’s Biodiversity Net Gain policy that comes into effect in November. However, the government has still not published the regulations needed for the system to run, and local authorities are now arguing that they don’t have the in-house expertise necessary to assess applicants’ proposals.
Now, the growing decline of recourse is being noticed nationwide by councillors. A report by the National Planning Barometer concluded that there was a “crisis of resource that sees local authority planning departments unable to deliver the service on which the system relies”. Six in ten of those surveyed said their planning teams lacked the resources to do the most efficient job. Yet, the report illustrates how planning teams had become disappointed by council planning committees voting against their recommendations, claiming a “fundamental difference of opinion” between planners and councillors.
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Councillors also thought that slow progress by developers was a reason for not enough houses being built, yet it’s been noticed that most builders could ill-afford to move slowly with their sites and delays could often be attributed to poorly resourced planning departments. Whether it be battling against record material and labour prices, an historically small workforce, regulations that stifle the ability for builders to work, as well as being in the grips of a mental health crisis, the construction industry is facing significant obstacles.
Clive Holland says: “The government target of 300,000 houses to be built per year, even before COVID was extremely unrealistic for a couple of reasons. After Brexit, a lot of our support teams went back to their own countries, we didn’t have enough people in our industry, we’re already short of trades people as it is. Everybody except for emergency services, and the building industry, believe it or not, and trade associated trades, virtually stopped working during COVID, 80% of the population were furloughed, and so on. So it was always going to be a tricky one, to try and get anywhere near that demand of 300,000 houses built.
“Now you’re in a situation where a lot of house builders have mothballed a lot of their sites because they can’t sell them due to rising interest rates. Lots of sites generally around the country would have been flooded with people buying off plan without even looking at the house.”
The latest PMI Survey revealed that builders attributed this decline to higher borrowing costs and a “subdued” outlook for the housing market. Despite the UK avoiding a recession, as confirmed in the most recent Budget, the construction industry is still significantly hampered by a crippling skills deficit and record prices for materials.
The latest Construction Skills Network report cites that the UK needs an extra 225,000 workers by 2027 to keep up with construction demand, the equivalent of 45,000 per year. Overwhelming work schedules, material shortages and new directives such as ULEZ have left hundreds of thousands of small businesses – equalling 27% of SMEs in the trade – on the verge of breaking point and collapse, a study from Fix Radio found.
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