Are the government‘s planning reforms releasing more land for housing?

Last Updated:

5th May 2014

Author: Allen Wilén – Economics Director at Glenigan

In March 2012 the government overhauled the English planning system, implementing its National Planning Policy Framework (NPPF) in an effort to simplify regulations and increase the supply of new homes. Over the subsequent two years, Glenigan’s research team has tracked a substantial increase in both the number and proportion of new build residential applications securing planning approval in England, with fewer applications being refused or withdrawn. However the rise in planning approvals has not been uniform and the overall success rate of planning applications in England still falls short of that typically seen in other parts of the UK.

According to Glenigan’s new Residential Planning and the NPPF report, the number of permissions granted last year for larger housing projects of 10 or more dwellings was 4,900 - 24 per cent up on the average seen in 2010/11 and 2011/12. Undoubtedly, the rise has been due in part to brighter market conditions supporting an increase in planning applications. However over the same period the number of applications withdrawn fell by 7 per cent to 640, while the number of refusals rose by only 3 per cent despite a sharp increase in applications. The withdrawal rate is significant as applicants will often withdraw a proposal following discussion with council officers and an appraisal of the likelihood of the application’s success.

The number of permissions for small residential schemes of three to nine units has also increased sharply since the introduction of the NPPF. Almost 10,500 applications were approved last year, a 29 per cent rise on the annual average in 2010/11 and 2011/12.

Nevertheless, the approval rate for small residential schemes remains far lower than for other types of residential development. Only 69 per cent of smaller residential applications ended in approval last year. While this is up on the 65 per cent approval rate seen in 2010/11 and 2011/12, it falls short of the 77 per cent approval rate for larger developments and for applications for one and two dwelling schemes and house extensions (83 per cent). The proportion of smaller residential applications that were withdrawn was unchanged at 12 per cent, while refusals accounted for 18 per cent of planning outcomes in 2013/14 compared to 23 per cent during the two years prior to the NPPF.

The reasons for the lower approval rate of these smaller schemes are unclear. However, the costs of compiling the required evidence and reports in support of a planning application can be substantial. It is also probable that smaller scale developments are more likely to be in close proximity to existing homes and may face opposition from local residents.

The rise in approval rates indicates that the NPPF has begun to release more sites for development. However, despite the rise in planning approvals, new housing supply continues to run below the potential growth in new households. Glenigan analysis also found that there were marked variations between approval rates across the English regions. Strikingly, approval rates remain lowest in the areas of greatest housing stress, with London and the South East seeing the lowest proportion of both large and small residential projects approved.

Download our Residential Planning & the NPPF report by clicking here.

Read the full story on the Daily Telegraph website, here.

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