Planning surge puts London’s new homes targets within touching distance
- Official targets within grasp after boom in homes approved in the capital – now at rate of 47,460 per year
- Homes given permission accelerate by 73% since end of 2014, as 11,870 homes enter the pipeline just in Q1
- Homes started in London up 211% in the first quarter, but could go further still as planning pipeline takes off
- Completed homes set to follow in turn – despite currently standing at barely half the official annual target
- Tower Hamlets approves 2,940 homes last quarter followed by hotspots in Greenwich, Camden & Southwark
A wave of new homes have cleared the planning system in the opening quarter of 2015, bringing London’s official housing targets within feasible reach, according to the latest London New Homes Monitor from Stirling Ackroyd.
The number of new homes approved by the planning system in Q1 represents an annualised figure of 47,460 new homes across Greater London.
This is nearly 20,000 more homes per year than the equivalent rate of approvals in the previous quarter (Q4 2014), or a 73% acceleration.
This means homes are now receiving the go-ahead fast enough to hit official City Hall and UK Government targets.
In the first quarter, 11,870 homes were given planning permission across 1,553 separate sites, according to the study of all planning applications decided across the capital’s 32 boroughs and the City of London. These approvals represent 82% of the 14,400 total homes applied for in Q1. Had every single home building application been approved, London would now be well on track to housing the predicted annual population growth of London, with what would have been an annualised 57,590 homes.
This acceleration in the initial stages of the house building process is yet to feed through to completions. The opening quarter saw just 5,420 completed homes, meaning that this number of new properties finished in Q1 only annualises to a much less impressive 21,680 new homes per year. As such, this number of finished homes may be small, but has been rising steadily since Q3 2014 – 5,420 completions in Q1 2015 represents a 29% uptick on the previous quarter.
Much more impressive, however, was the number of new housing starts. Annualised, the number of housing starts in Q1 2015 stands at some 38,200 – just shy of government housing targets, but more than three times the number of housing projects started in Q4 2014, and up 54% compared to the number of starts in the same quarter last year.
Andrew Bridges, Managing Director of Stirling Ackroyd, comments, “New homes are on the way. Having stuttered for so long, London has developed a clear housing deficit. If this pipeline of new property comes to fruition, it will represent exactly the heavy-duty, industrial scale of response needed to start filling the housing hole.
“Things are finally going in the right direction, yet in fact, government targets may not be set high enough. Our analysis shows London needs to build an average of 57,000 new homes a year just to cope with expected population growth over the next decade. That means astronomical improvements in approvals and building starts need to be sustained, and even improved upon, for the next three quarters just to meet what’s needed this year. So Londoners should hope this is more than a brief alignment of the stars, and any complacency now would be a mistake.”
Tower Hamlets, Greenwich, Camden lead the resurgence
In the opening quarter of 2015, Tower Hamlets approved 2,940 homes, by far the largest number given the go-ahead by any borough. The next most prolific planning department, Greenwich, trailed by over a thousand potential homes, but still approved an impressive 1,930 homes in the first quarter.
This means that Tower Hamlets gave permission for one-in-four homes (25%) across Greater London in Q1. In second place, Greenwich approved 16% of the capital’s total homes, while Camden came in third – giving planning permission to 1,053 new homes, or 9% of the total across London in the first quarter.
At the other end of the scale, areas like Lambeth (26 homes approved) Kingston (21) and Barking (8) were the three worst boroughs for planning approvals, collectively contributing less than 0.5% of all planning approvals in Q1 2015.
Approvals in these most prolific boroughs have picked up on an individual basis between Q4 2014 and Q1 2015. At the top of the table, Tower Hamlets has pulled further ahead with 146% quarter-on-quarter growth since allowing 1,197 homes in Q4 2014.
Greenwich has witnessed an even more impressive pick-up in Q1, with more than three times the relatively modest 575 homes allowed in the previous quarter – taking Greenwich from fourth to second place.
Meanwhile, Camden and Southwark have shot up the leader board from 21st and 19th respectively in Q4 to third and fourth in the first quarter of this year, after approving a clutch of medium-sized housing developments.
In total, eleven boroughs gave approval for fewer homes last quarter than in the previous three months – however twice as many (22) saw an acceleration in the number of homes getting permission.
Greenwich and Tower Hamlets allow greatest proportion of homes
Comparing the number of homes given permission to the total number of potential dwellings applied for via planning applications, boroughs vary by the leniency or rigour with which they have interpreted their planning guidelines.
Looking at this proportion of potential homes given planning permission, Greenwich and Tower Hamlets now lead the way in joint first place at 99%. Next, in joint third place, Camden and Southwark allowed 97% of homes decided by their respective planning offices.
This represents a significant turnaround for Southwark, which only allowed 13% of potential homes in the previous quarter, which had made Southwark the strictest of all boroughs by this measure in Q4 2014.
At the other end of the spectrum, Hillingdon was the least lenient London borough by this measure, allowing just one in five potential new homes (20%) in Q1, followed by Croydon at 32% and Barking & Dagenham at 33%.
Andrew Bridges continues, “We’re witnessing the seeds of an exciting turnaround in London’s previously arid environment for new builds.”
“This isn’t to say that we’ve seen the whole of Greater London turn into a land of milk and honey – some boroughs are quite clearly carrying more than their fair share of weight.
“Planning permissions in the eastern City fringes are far more responsive to the housebuilding drought than the traditionally higher-end boroughs of western London.
“This partly comes down to the types of property approved. In Tower Hamlets especially, multi-dwelling towers are allowing for a much greater property density. Boroughs might be understandably cautious about the effect that higher-density building can have on the feel of an area – but London needs to rise to the challenge. We have identified space for half a million new homes in London. The footprint for these homes can come from brownfield sites, but much of the space needs to be found vertically.”