It’s a sluggish and disappointing start to 2016, which should be a year of real progress.
As London braces for mayoral elections, approvals for new homes dropped by 64% from the same point a year ago, as just 4,320 homes across the capital were granted permission in Q1 2016, according to the latest London New Homes Monitor from Stirling Ackroyd.
On an annualised basis this would result in a total of 17,290 new homes granted approval by London’s planning authorities per year – well behind the estimated 50,000 Stirling Ackroyd have calculated are needed per year to house London’s growing population.
By comparison, in Q1 2015, planning departments gave permission for 11,870 new homes across London, or an annualised rate of 47,460.
Not only are planning approvals down across the final full quarter before the mayoral election, the number of applications from developers also fell, particularly on an annual basis. Q1 2016 saw planning applications for a potential 7,050 new homes, significantly behind the 14,400 potential new homes possible in Q1 2015.
Andrew Bridges, managing director of Stirling Ackroyd, said: “It’s a sluggish and disappointing start to 2016, which should be a year of real progress. In an election year, the most frustrating side to the slow pace of planning departments is that London has the drive, capacity and ability to take control of its housing problems. Londoners want change. And if you believe all the mayoral candidates’ speeches – everyone wants a positive outcome too.
“But change isn’t happening. The number of homes are falling to new lows, contributing to a completely unfair and immoral housing shortfall. On the streets of the capital, homes are the top concern – and yet this isn’t being heard. Housing is politically fashionable – but sadly not politically practical. As the Chancellor demonstrated in the Budget last month, housebuilding can slide down the agenda quickly. It’s imperative this slide doesn’t happen this summer after the new Mayor takes office in City Hall. There’s no easy fix, and building alone isn’t sufficient to get people on the homeownership ladder. But enough new homes are a necessary starting point that is still so far away from reality.
“More homes bring more options. For those locked out of London every small improvement helps. But planning is the blockage. Unless all planning officials embrace a pragmatic approach to divvying up London’s space – the housing deficit will only worsen.”
London boroughs rejected four out of every 10 possible new homes in the first quarter, meaning all boroughs together approved a proportion of just 61% of potential new homes across Q1 2016 – compared to an allowance rate of 82% in Q1 2015.
In proportional terms, Southwark is the most liberal borough for planning, approving 97% of homes mentioned in planning applications in Q1 2016 – managing to equal its Q1 2015 proportion.
By the same measure, Westminster also performed well – granting approval to 95% of new home applications across the quarter. It was closely followed by Barking and Dagenham and Kensington and Chelsea, both of which allowed 94% of all planning applications for new homes.
However, for Havering it was a very different story. The outer borough approved just 10% of all new homes mentioned in applications across the three month period. And another eastern borough, Bromley, granted a similarly disappointing proportion of 27%.
Hammersmith and Fulham saw only 17% of applications receiving approval in Q1 – placing it second only to Havering (allowing just 10% of possible homes) among the most sceptical boroughs for new homes.
Bridges added: “London is selling itself short – the proportion of approvals across the capital is far too low. For developers and prospective homeowners and builders, there’s mixed messages about planning leniency. Many promises have been made to overhaul planning within London and put an end to unnecessary delays – but little has actually been done. It’s a difficult task but what the capital needs is a coherent and measured plan, which every council can follow, and one which prioritises every opportunity for new homes.
“Of course, planners are needed. It’s a massive dilemma of how to balance development with local concerns. Communities will naturally always be concerned about the impact developments might have upon the local area and landscape. But for just 10% of applications to be accepted in Havering, if this was applied to the whole of London, would be entirely unsustainable. The capital is in crisis.
“A housing shortfall has been a prolonged problem in London – but as population levels keep on growing it’s getting increasingly serious. And so far, no one, and certainly no mayoral hopefuls, are really waking up to this fact.”
Westminster, perhaps unexpectedly, is leading the way when it comes to tackling London’s housing crisis in 2016. Leading by example, the borough approved – in absolute terms – a total of 626 new homes.
This improvement has been fuelled by demand for high-volume developments within the central borough.
Westminster has seen a marked improvement from Q1 2015, when it accounted for just 193 applications for new homes successfully granted.
Westminster is closely followed by Enfield with the North London borough approving applications accounting for 520 new homes – out of a possible 615 – across the first three months of 2016. Traditionally amongst the strictest boroughs, Enfield across the whole of 2015 approved just 859 new homes, out of a possible 1448, suggesting local planning officials may be embracing a new approach to decision making. Finally, approving the third highest number of new home applications is Barking and Dagenham – approving 379 new homes applications. In Q1 2015, the borough granted just eight.
Richmond, meanwhile saw the fewest number of new homes approved across the quarter, with just 11 new homes given approval – even lower than the 31 permitted in Q1 2015.
Over the last four quarters as a whole, Barnet and Westminster allowed the most new homes in absolute terms with approval for 2,662 and 2,022 homes respectively.
Hammersmith and Fulham performed much better over this four-quarter basis (allowing 1,875 homes) followed by Greenwich which permitted 1,758 homes over the twelve months to 1st April. At the other end of this spectrum, Richmond upon Thames was the worst borough on a four-quarter basis as well as in Q1 2016 individually. Over the last twelve months Zach Goldsmith’s home borough has allowed just 120 homes – permitting an average of just one home every three days.
Bridges said: “London’s planning patchwork can be volatile. Westminster is the unexpected hero of 2016 so far – and is soaring ahead in approving the highest number of new homes. Westminster’s centrality is an instant draw for developers but many have been off-put by the borough’s reputation for its uncompromising planning policy. In a sense, Westminster is a success. But an alternative view is that it’s the best borough of a bad bunch.
“Overall the number of homes allowed is far too low and normally it’s the east of the capital which carries the weight of new homes approvals. But even London’s eastern boroughs are struggling to reach the approval levels needed. Remaining scepticism about large developments may explain the drop, but a similar fall in the possible number of applications could also be suggestive of a reluctance to change the planning system. Fundamentally, more needs to be done to encourage developers and self-builds.
“Next week London will go to the polls to choose a candidate for the next four years. Hopefully, regardless of party political lines, the winning candidate will be able to shift the dial much more significantly – and prepare London’s housing landscape for the 2020s.”
