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Localism 'will shrink' developments

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Changes to the planning system will see developers scale down the size of housing developments, according to the findings of a new survey

Some 58 per cent of the 200 housebuilders surveyed by property consultants Knight Frank said they thought the average number of homes per development would shrink due to changes such as the Localism Bill.

Nearly half of the polled for the annual housebuilders survey believed large-scale, infrastructure-led developments will become less important as a result of the plans.

Currently three and four-bedroom homes are the most in demand as developers move away from urban and apartment-led schemes, the survey found.

David Fenton, head of regional land at Knight Frank, said: ‘As a result of the localism agenda, we are likely to see a move towards lower density, better quality housing developments, as this is what locals will want to see.

‘I expect that it will become increasingly difficult for large, infrastructure-hungry sites to get planning permission.’

Read more about the impact of localism on the profession on the AJ’s dedicated Localism page.

Other results/findings of the Knight Frank survey:

• Planning is becoming a bigger issue for housebuilders: nearly 60 per cent of builders surveyed said localism legislation will slow the speed of obtaining consents

• Mortgage finance is the single greatest threat to the new homes sector, closely followed by future rises in interest rates and weak UK economic growth; 39 per cent of builders surveyed suggest implementing subsidised mortgages for first-time buyers


• Knight Frank finds the UK new homes market will fail to deliver nearly enough homes to service the growing population, with housing starts down 43 per cent on 2007 levels: at current rates, the number of new homes being built is less than 50 per cent of the annual increase in the number of households

• Housebuilders report 3- and 4-bedroom houses as the most in-demand product, and 58 per cent predict the average size of developments, in terms of the number of units per development, will decline – reflecting an ongoing move by the industry away from urban and apartment-led schemes
• Land values, while still down 40 per cent from their peak (Q4 2007), are likely to remain firm in 2011, the restriction of land available thanks to changes in the planning regime will offset the increased land coming to the market as a result of distressed site sales.
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