Homes: Sharp fall in building approvals despite housing shortage

The number of new homes for which local authorities have given planning permission has fallen sharply during the past year, research indicates.

Councils in Great Britain granted approval for just 36,411 new homes during the third quarter of 2010, 18 per cent fewer than during the same quarter of 2009, and the second lowest level during the past five years, according to the Home Builders' Federation (HBF).

It was also the second consecutive quarter during which approvals had fallen, ending the previous trend of improving levels of homes with planning permission.

At just over 36,000, the number of new homes that developers have received permission to build is running at half the level seen during early 2006.

The group warned that the fall in approvals would further exacerbate the country's already acute housing shortage. It is estimated that the UK faces a shortage of around one million properties, and 232,000 new homes need to be built each year until 2033 to keep pace with rising demand.

But the number of properties built in 2009, the latest full year for which figures are available, sank to its lowest level for peace time since 1923, with just 118,000 homes completed.

The HBF said it typically took three years from planning permission being given to when a home was completed, and it urged councils to grant more approvals.

It pointed out that the fall in planning permission coincided with changes to the planning system introduced by the new Government, with a shift from centralised targets to giving more power to local authorities.

The report found that the North of England and the Midlands, have seen the biggest improvement in planning permission levels during the first nine months of 2010, compared with a year ago, although these areas saw the steepest decline in 2008 and 2009.