Home Builders Federation blames councils for ‘housing shortage’

new building being built

In a retort to local authorities, who have accused house builders of ‘land banking’ in order to suppress supply and drive demand, the Home Builders Federation has said that it is the local authorities that are to blame for the current under supply of new houses.

The Home Builders Federation, which represents the largest house building companies in the UK, has said that local authorities must grant more planning permissions. The body estimates that, for the government to be able to meet its target of building 300,000 more homes annually in England by 2025, between 104,000 and 115,000 more planning permissions need to be granted in every one of the next two to three years.

Local authorities have said that currently 90% of planning applications are currently receiving approval, over double the rate normally granted ten years ago.

The Local Government Association (LGA) has published a new report concluding that over the last ten years over 1.1 million new homes, that had been granted planning permission, had not been built.

The LGA wants new powers to be awarded to councils in a Planning Bill that will incentivise developers to respond to house building more rapidly. Proposals include charging developers full council tax for every unbuilt property from the expiry time of the original planning permission.

The Home Builders Federation said the report was misleading, and that some planning permission would relate to the replacement of previously granted permissions, brought about by the need to reflect changes to designs or technical amendments. It also highlighted the problem of raising funds for infrastructure, which was often necessary on larger sites but could not necessarily be secured until after planning permission had been granted.

There are some occasions an application for planning permission is used to ascertain a council’s objections to a proposed development, and this can sometimes lead to the original design withdrawn and replaced with a fresh proposal.

The LGA wants more council homes to be built to fully address the current housing crisis, which can only be achieved by giving councils more financial freedom to build new homes and additional power to begin a house building programme of 100,000 new council properties a year. A recent survey by the LGA found that 88% of Peers and 80% of MPs were in support of the plan.

LGA housing spokesperson said: “Councils are committed to working with government and developers to build the housing the country needs. It is good the number of homes built each year is increasing. But by giving councils the right powers to incentivise developers to get building once planning permission has been granted, we can go further and faster.

“Councils are granting permission for hundreds of thousands of homes but families who desperately need housing, cannot live in a planning permission. This is why we need the Queen’s Speech to deliver the reform needed to enable councils to tackle the housing crisis.”