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Planning permissions hit five year low

The number of schemes given planning permissions in te UK fell to just 115,000 last year – its lowest level in half a decade

Figures from industry monitor Glenigan and the Home Builders Federation show the number of consents is now half its 2006 level.

Last year the underlying value of planning approvals fell 12 per cent compared to the year before

Around £29.8 billion worth of construction projects were approved last year compared to £33.8 billion for 2010.

Glenigan data for the three months to February however showed the underlying year on year value of construction projects starting on site increased 17 per cent.

In the same period private residential projects increased 42 per cent and civil engineering projects were up 63 per cent.

Glenigan economist James Abraham said: ‘Glenigan forecast private housing starts to remain buoyant over the coming months despite the increase being exaggerated by the impact of the severe winter of 2010/11 on project starts.

‘Utilities and infrastructure sectors saw significant increases in project starts with investments in rail projects in London and the South of England and heavy investment in Scottish utilities projects including recycling plants and wind farms.’

Looking ahead, he added: ‘Government spending cuts will continue to restrict new health, education and social housing projects leading to an increase in refurbishment work this year. The flow of civil engineering projects is expected to remain steady because the Department for Transport’s budget was saved from the larger scale cuts imposed upon other departments in the Comprehensive Spending Review.

‘While industrial and office building has returned to growth, the sustainability of this growth depends on domestic and international economic prospects.

‘Retail construction prospects, buoyed over the last two years by supermarket expansion, will shift as firms refurbish or extend current stores. Private housing construction has recovered following the declines seen over 2011; however the rate of growth will be hampered by poor household earnings growth and potentially flat house prices.’

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