A 'defective' planning system is causing delays to much needed building works, says Harworth CEO
Lynda Shillaw, chief executive of land and property regeneration specialist Harworth Group, has said that delays in planning approvals are causing uncertainty for investors, as well as creating challenges for economic growth.
Ms Shillaw’s comments come as new research from The Home Builders Federation shows that planning permission for new homes across England and Wales has fallen to the lowest it has been since records began in 2006.
Around 2,500 projects were granted permission during the second quarter of 2023, 10 per cent less than the previous quarter, and 20 per cent less than the same period the year prior.
Ms Shillaw said: “Planning approvals are taking a lot longer, and that introduces uncertainty into the system for investors, occupiers and developers.
“What that also does is reduce the amount of land that is available for development immediately, and that actually is a real challenge around growth.”
Ms Shillaw noted that changing rules around biodiversity net gain and net neutrality, amongst other issues, had slowed planning procedures in recent years.
She added: “That's just one of many things happening in the planning realm. Its harder and slower and just far more complex.
“There's a lot that needs to be thought through. Nobody is going to fight an electoral campaign on planning reform, but at some point, if we need to grow the economy, these things are going to have to be addressed.
“Politicians have got to sit back and look at planning, and think “this is fundamental to supporting economic growth.”
The comments come as Harworth Group posts its half year results for 2023.
The firm reported operating profits of £8 million for the first half of the year, down from almost £100 million in the first half of 2022, but noted that this was in large part due to the company bringing forward a number of development property sales, which were brought forward into 2022 to capitalise on the strength of the residential market at the time.
Sales of serviced land and property, in addition to income from rent, royalties and fees, resulted in Group revenue of £18.2 million, a drop from £62.6 million in the first half of 2022. Revenue was, however, broadly in line with the first half 2020 and 2021.
The firm also pointed to the sale of £70 million of its investment portfolio assets so far this year, at prices that are in line with, or ahead of its December 2022 book values.
Harworth Group also said it had made progress towards its plan to become a £1 billion company by 2027, including its plan to develop an average of 800,000 square feet of industrial and logistic space per year.
The group also has plans to reposition its investment portfolio to be Grade A property. This has improved from 18 per cent of the portfolio being Grad A at the end of 2022 to 29 per cent at the end of the first half of 2023.