Outlook for residential development
Trends in English housing market activity from 2012 to 2018 show that the industry requires stability in policy in order to effectively function and grow at a consistent rate. Against a backdrop of rapidly developing global uncertainty, stability in policy is a clear controllable input which can benefit housebuilding.
The level of planning stability will impact the rate of planning activity over the next five years. An unstable environment with further policy changes and greater uncertainty is reflected in our lower scenario below, while a continuation of existing policy is reflected in our central scenario.
Historic evidence suggests that consistency in policy will drive growth in plan adoption in line with existing trends. With stricter rules around housing need, we anticipate this could result in a total adopted housing requirement of just over 280,000 homes per annum by 2031. Within this scenario, we would expect a return to growth in consents granted comparable to historic trends, reflected in a healthy supply of deliverable sites nationally.
The scenarios below are based on existing evidence, and some adjustment to the upside could be driven by the more streamlined nature of the new planning system in accelerating the delivery of plan adoption. Conversely, activity in the market will also hinge on external factors, and general improvements in the market conditions outlined earlier in this report will be necessary to allow current policy to reach its full potential.
The level of adopted housing requirement will vary based on the extent to which existing planning policy remains in place. An annual housing requirement of just under 265,000 homes per annum assumes that further changes to the NPPF are implemented over the next five years, reflecting experiences from 2018 onwards. Lower consents granted under this scenario are a feature of the instability and uncertainty caused by this policy shift.
Historic evidence suggests that greater consistency in policy will drive growth in plan adoption in line with existing trends. With stricter rules around housing need, we anticipate that this could result in a total adopted housing requirement of just over 280,000 homes per annum by 2031. Within this scenario, we would expect a return to growth in consents granted, comparable to historic trends and reflected in a healthy supply of deliverable sites nationally.
With the emergence of Local Government Reorganisation (LGR) and Spatial Development Strategies (SDS), planning will operate across wider functional economic geographies, with clearly established growth locations for the delivery of new homes and employment space. Alongside this, we would hope to see greater co-ordination across the current fragmented collection of infrastructure planning systems. The freedom to plan large sites in identified growth locations, alongside key infrastructure, will allow local authorities to plan above historic trends, towards Government ambitions of 300,000 homes per annum.
