UK housing crisis: Planning delays 'longer than ever' as new home registrations stall

The number of new home registrations by builders has stalled, but construction sector experts say it is just "a pause" before more growth. There were 152,329 new home registrations with the National House Building Council (NHBC) in the 2015-16 financial year, marking an annual rise of just 0.04%.

Registrations of new homes by builders are an indicator for housing completions in the future. Builders register new homes after they have secured planning permission, but before any construction work has taken place. Most registrations become homes.

"It's a bit of a surprise to see that the numbers are flat," said Mike Quinton, chief executive of the NHBC, an insurance and warranty firm that covers 80% of the market for new homes. "It's a pause... But all the mood music is we expect to see further growth coming through in future years."

In the first quarter of 2016, 36,566 new homes were registered, down 9% over the year, though the NHBC said this was because of a strong comparative period in 2015. New registrations are also up 80% since the recession.

A housing shortage in some parts of England - in particular, London - is driving up rents and house prices. Estimates vary between 200,000 and 300,000 on the number of new homes England needs every year to meet the high demand. The Office for National Statistics (ONS) said the average house price in the UK rose 7.6% to £284,000 in the year to February 2016 - much faster than the average wage growth of around 2%.

Quinton said he had heard anecdotal reports from the housing construction sector that, despite the flat registrations figures, builders are still increasing output and have plans for growth in the future. Demand is also being supported by schemes such as Help to Buy and shared ownership, which make it easier for first-time buyers to get onto the property ladder despite high house prices.

Planning law 'treacle'

Figures from the Home Builders Federation (HBF) and Glenigan released on the same day show initial planning permission was granted for 255,032 new homes in England in 2015, a sign that registrations are about to pick up again and more much-needed housing is on its way. This is the highest number since 2008 as the financial crisis unfolded.

"We are on course to go through the often-cited, magical 200,000 homes a year number in England at some point in the next 18 to 24 months," said Stewart Baseley, executive chairman of the HBF, though he said this is subject to economic, political and policy stability, a hint that a vote for Brexit in the upcoming European Union referendum could throw housebuilding off course.

Baseley also warned he is hearing from builders that it is "taking longer than ever to actually work sites through the planning system" despite the government's ongoing programme to relax rules for building homes. "The treacle there that you have to navigate in order to actually get on site is just growing as opposed to shortening," he said.

This echoes the recent findings of a construction sector survey by the Royal Institution of Chartered Surveyors (Rics). "Our survey tells us that planning delays are one of the biggest barriers to growth in the construction sector," said Simon Rubinsohn, chief economist at Rics. Skills and land shortages are also problems.

Official figures show housing completions picking up markedly in 2015 in England and Wales. The Department of Communities and Local Government (DCLG) said there were 142,890 housing completions in the 12 months to December 2015, a 21% annual increase. There were 143,560 starts, a 6% rise year-on-year.