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Shortage of planning approvals is good news for landowners

Shortage of planning approvals is good news for landowners

It could have been avoided, but there’s a housing crisis looming and landowners are in line to reap the rewards. 

A tinder box is about to be ignited because the UK population is growing by 300,000 per annum and there is an insufficient land supply to meet the burgeoning requirement to deliver new housing.  Families with young children are seeking larger homes, singletons are desperate to escape from their parent’s spare room and of course migrants seeking long-term habitation will be using the rental sector as a short-term solution only.

Approximately 5 million new homes will need to be built in the next 20 years, so that’s 250,000 per year and yet in 2011 only 109,000 were built, a 7% drop when compared to 2010.  In some cases planning applications have been affected by the lack of available finance for small and medium sized house builders.  However, attempts by DCLG to introduce major planning policy changes before Parliament has enacted them (National Planning Policy Framework and Localism Bill), has caused industry wide confusion thereby creating a vacuum of submissions.

Richborough Estates Paul Campbell states:

“Whilst the last 12 months has been very frustrating from a planning point of view, we are encouraged by the appetite of volume house builders to purchase land.  The relative shortage of land with residential consents, allied to the pent up demand that can only increase with time, suggests that land owners with land assets in the right locations should be relatively positive about their prospects of achieving planning permission. 

Strategic land promotion is always a difficult path to tread and even if planning policy is simplified in future, adopting the right strategy from the start and then being able to react to change along the way is absolutely key to our success”.

Statistical sources:  House Builders Federation Housing Market Report Q4 2011, Guardian newspaper.