Stats behind the headlines suggest shortage of homes persists in England

Stats behind the headlines suggest shortage of homes persists in England

Article by Ray Clancy in PropertyWire  03 May Weekly 2016 (reproduced with permission of PropertyWire Weekly)

Stats behind the headlines suggest shortage of homes persists in England

As a journalist I always try to look beyond the headline and the first couple of paragraphs in a press release. Indeed, over the years I have found the best story hidden in the middle and even at the bottom of a release.

That has certainly been the case in recent days with figures released by the Department for Communities and Local Government (DCLG) on homes in England. The press release was angled towards the fact that the number of empty homes now at their lowest level since records began.

This is good news of course, it makes a story and a headline. But far more interesting were other figures that show that the number of homes in England at the end of March 2015 were up by just 0.73% compared to the same point in the previous year.

The data shows that there was an increase of 171,000 dwellings but this if far short of the government’s target of one million new homes by 2020 and we don’t know how much of the increase were new builds.

The figures could be regarded as a disappointment at a time when the UK government has highlighted a number of flagship policies aimed at building more homes. One wonders if the pledges made to increase the housing stock is yet having much of an effect.

The statistics represent the current shortage of places to live in England which is why we are seeing house prices and rents rising. Not only is there not enough homes to buy but not enough to rent either with the latest figures from the Association of Residential Lettings Agents (ARLA) showing that supply is falling.

Some experts believe that more needs to be done to bring empty homes back into circulation and the figures certainly show that is being done, according to Housing and Planning Minister Brandon Lewis.

He also points out that the number of new homes being built is up by a quarter in the last year alone, the highest annual percentage increase in net additional homes for 28 years and it should be noted that these are not included in the figures mentioned at the start of this newsletter.

But getting empty homes back into circulation doesn’t come cheap. The Government is rewarding councils for bringing empty homes back in to use through the New Homes Bonus and since April 2011 councils have been allocated over £4.8 billion for providing new homes.

To be fair, it will take time for a lot of the flagship Government policies to filter down to the housing market, including changes to make the planning process quicker with less red tape and the Starter Homes package is yet to come into full flight.

On the planning front there is some good news. Initial planning permission for 255,000 new homes was granted in England in 2015, up 57% from a low point of 162,204 in 2009, according to the latest pipeline report from the Home Builders Federation (HBF) and Glenigan.

Permissions granted in the fourth quarter of 2015 were up 13% on the same quarter in 2014, to 74,759, as developers submitted more applications to ensure they can continue to deliver further increases in supply.

Over 180,000 new homes were added to the housing stock in 2014/2015, up 22% on the previous year as house builders increased output in response to the rise in demand for new homes.

However, many of the permissions counted in the report still have many hurdles to cross as builders and developers navigate the complexities of the planning system before actual building work can get underway, for example discharging planning conditions.

The industry continues to urge Government to streamline the planning process and ensure local authorities have the capacity to deal with the volume of applications now being processed so builders can get on to more sites more quickly.

The figures, however, are a strong indicator of future supply, and suggest that housing completions will continue to rise as these permissions are turned into implementable permission and are the sites built out over the coming years.

So while the official figures might be disappointing the housing sector in the UK is moving forward, perhaps just not as fast as many would like.

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