Housing developers ‘drip-feed’ new homes to push up prices, think tank says

NEW HOUSES are being approved in much greater numbers than homes are being built with developers “drip-feeding the market in order to push up prices”, a think tank has said.

Planning permission has been awarded in England for 2,035,835 houses between 2006 and 2015 – an average of 204,000 new homes a year, according to Civitas.

But analysis shows that during the same 10-year period the number of homes started was 1,261,350 – an average of 126,000 a year.

Civitas said this shortfall has been growing wider over the past five years, and that an increase in the number of planning permissions granted since 2011 has not been matched by a comparable increase in starts or completions.

In 2015 there were 261,644 homes permitted for development, but just 139,680 recorded starts, leaving a deficit of 121,964.

In its analysis, the think tank said: “The number of homes approved for development has far exceeded the number of starts every year for the past decade, and the gap has been growing rapidly since 2011.

“The building industry casts doubt on the veracity of the starts data, but even allowing for a reasonable margin of error the overall picture is clear.

“So is the trend that this is getting worse not better. Even allowing for some delay between permission being granted and ‘spades in the ground’, it is clear that new housing units are being approved by planning departments in much greater numbers than homes are being built.

“Any strategy to secure a stepchange in housebuilding output must address this discrepancy.”

Daniel Bentley, editorial director at Civitas, said: “The planning system and the potential for communities to frustrate new homes developments are frequently blamed for the housing shortage. But it is increasingly evident that the brake on development is being applied by those who are sitting on land which is ripe for new homes and has been given the allclear by planning authorities.”