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Antony Antoniou – Luxury Property Expert

Planning approvals fall to record low

Planning approvals fall to record low

The Decline in Planning Approvals: NIMBYism and More

In the realm of UK construction, planning approvals for new homes have recently plummeted to historic lows, leaving the industry grappling with challenges from multiple fronts. A confluence of factors, including the rise of NIMBYism, dwindling demand, and the conclusion of the Help to Buy scheme, has cast a shadow over the housing market’s future prospects.

**Record Low Approvals**

The alarming statistics reveal that planning permissions granted for new residential developments in Britain have nosedived by 20% over the past year. This decline marks the lowest level recorded since comprehensive data collection began in 2006. According to the Home Builders Federation, a respected trade body in the UK, the number of approved homes has tumbled dramatically, nearly halving from a peak of 110,000 in the first quarter of 2021 to a mere 62,700 in the second quarter of this year.

**The Rise of NIMBYism**

One of the primary culprits behind this plummet is the ascent of NIMBY (“Not In My Back Yard”) sentiment among local councils and communities. The government’s decision to abolish mandatory house-building targets for local areas at the end of the previous year has empowered these groups to obstruct more planning applications. This move was seen as a concession to the growing influence of backbench MPs advocating for NIMBYism.

**Government Intervention and Community Input**

Adding to the complexity of the situation is Michael Gove, the Levelling Up Secretary’s, commitment to curbing the construction of what he terms “ugly” homes. His vision includes empowering communities with more authority to shape the aesthetics of new builds within their neighborhoods. This newfound power was on full display when he overruled planning inspectors in April, rejecting permission for a 165-home development in Kent due to its deviation from the local design code.

**Warnings of a Housing Crisis**

The ramifications of this decline in approvals are far-reaching. Industry experts have sounded the alarm, warning that the UK’s housebuilding industry could soon see the lowest levels of home construction since World War II. The government’s repeated failure to meet its annual target of constructing 300,000 homes in England is exacerbating the property shortage and driving up prices.

Neil Jefferson, the managing director of the Home Builders Federation, criticized government policies as “increasingly anti-development and anti-business.” He contends that these policies have led to a sharp reduction in home construction. Jefferson warns of the social implications, particularly for young people, and the potential economic fallout in terms of reduced activity and job losses.

**A Ray of Hope?**

Amidst this gloomy scenario, there is a glimmer of hope. Following relentless pressure from builders, the government has pledged to modify water legislation to facilitate more home construction. “Nutrient neutrality” rules, which aim to limit nutrient pollution, have thwarted construction to the tune of 150,000 homes. Taxpayers have been left to foot the bill for compliance, a situation that the government intends to rectify.

However, developers are also grappling with reduced demand due to high mortgage rates and the cessation of the Help to Buy scheme last year. Although the scheme was designed to support first-time buyers by subsidizing the cost of new builds, it faced allegations of inflating prices.

**Government Response**

In response to these challenges, a spokesperson for the Department for Levelling Up, Housing, and Communities stated, “Planning permission was granted for 264,000 homes in the last year, showing we are making good progress towards our target of building one million homes over this Parliament.” The government has plans to expedite the planning system, with substantial financial backing aimed at increasing planning capacity. Simultaneously, they are dismantling what they term “defective EU laws” to clear the path for constructing an additional 100,000 homes.

The future of the UK housing market remains uncertain, with numerous obstacles in the way of its recovery. However, with a commitment to reform and a focus on addressing the various issues at hand, there is potential for the construction industry to regain its footing and continue to provide essential housing for the nation.

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