Despite a slight rise in the number of units approved in quarter three of 2022, the rolling total for 2022 still remains significantly below the optimum levels seen in previous years and poses serious challenges to developers’ ability to increase housing delivery over the coming year.
The number of units approved picked up slightly during the third quarter of 2022, but only when compared to quarter two, which was significantly lower than all other quarters in recent years. At 78,312 units, quarterly approvals are 25% below the levels we were seeing in 2019, when housing supply was at its peak.
Overall approvals totalled 237,917 units during the first nine months of 2022, a 15% decline on a year ago, and the number of private sector housing projects (schemes of three or more units) was 14% lower than a year earlier.
Smaller sites in particular are seeing a decline in approvals, at around half the levels seen throughout 2018 and 2019, hampering the efforts of SME builders who are already disproportionately suffering from a range of supply restraints. To achieve housing supply targets, it is vital that SME builders are able to navigate the planning process and access suitable sites. HBFs research suggests that improving the number SMEs operational could boost annual net additions to the housing stock by 25,000.
Looking at the geographic spread of approvals, most parts of the country have seen an overall decline during the first nine months of 2022. The North East, Yorkshire & the Humber, Wales and Scotland have seen the sharpest declines against the first nine months of 2021, with falls of 40%, 30%, 24% and 32% respectively. The East Midlands was the only region to see a rise of 8% over the same period.
Permissions granted have been on a steady decline since the start of 2020, so while completions have remained high for the last couple of years, the effects of this decline are yet to be felt.
