Planning consents have surged this year, surpassing pre-pandemic levels, according to new data.
Manchester-based property investment company, BuyAssociation, said: “Supply chain issues and rising construction costs were just some of the issues striking the construction and housebuilding industries in 2020, alongside Covid. The year experienced the lowest level of planning permissions granted since 2015, at just 295,000 in the residential sector.”
New planning consents rise by 8%
However, 2021 saw a remarkable turnaround, new research from Sirius Property Finance has revealed. Not only was there an 8% surge annually on new home planning consents, bringing them to 319,000, but this was the third highest annual total since 2007.
BuyAssociation noted that Sirius reported some regional variations in its data. London could be the recipient of a healthy surge in housing stock shortly, as 60,200 residential properties or units were granted planning permission in 2021. This accounts for almost a fifth (19%) of the country’s total.
Increasing housing stock levels
The South East followed with 46,500 planning consents in the residential sector (15%) of the total. The North West, where Advantage has its HQ, is also set to benefit from large amounts of new housing, with 42,300 planning permissions granted.
Nicholas Christofi, managing director of Sirius Property Finance, said:
“While 2022 will bring its own challenges to the sector, granting the nation’s housebuilders the ability to build is the first step in increasing residential stock levels and addressing the current housing crisis.”
Although a rise in planning consents will help mitigate the under-supply of housing in the longer term, in the short term, the Guardian reported that a shortage of homes for sale last month sent house price growth spiralling for the seventh consecutive month to 12.6%, prompting concerns that property values are moving further out of reach of first-time buyers.
The price of a typical home is a fifth higher than in February 2020
Prices of the average home increased by 1.7% in February to more than £260,000 for the first time, said the building society Nationwide, accelerating the pace of growth from 11.2% in January.
The price of a typical home is about a fifth higher than it was in February 2020, shortly before the coronavirus lockdowns started in the UK, according to Nationwide. This equates to a cash increase of £44,140.
Advantage’s view: Although the recent upturn in planning approvals may be one of the factors that eases house price growth somewhat in the longer term, in the short term, we’re likely to continue to see a significant under supply of homes available to buy or rent, keeping prices at their current record levels.
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