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Sharp drop in planning permission for new homes

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The number of new homes local authorities have given planning permission for has fallen sharply during the past year, research shows

Councils in Great Britain granted approval for just 36,411 new homes during the third quarter of 2010, 18 per cent fewer than during the same quarter of 2009, and the second lowest level during the past five years, according to the Home Builders Federation (HBF).

It was also the second consecutive quarter during which approvals had fallen, ending the previous trend of improving levels of homes with planning permission.

At just over 36,000, the number of new homes that developers have received permission to build is running at half the level seen during early 2006.

The group warned that the fall in approvals would further exacerbate the country’s already acute housing shortage.

It is estimated that the UK currently faces a shortage of around one million properties, and 232,000 new homes need to be built each year until 2033 to keep pace with rising demand.

But the number of properties built in 2009, the latest full year for which figures are available, sank to its lowest level for peace time since 1923, with just 118,000 homes completed.

The HBF said it typically took three years from when planning permission was given to when a home was completed, and it urged councils to grant more approvals.

It pointed out that the fall in planning permission coincided with changes to the planning system introduced by the new Government, with a shift from centralised targets, to giving more power to local authorities.

Stewart Baseley, chairman of the HBF, said: ‘We already have an acute housing crisis and these figures show there is potential for it to get much worse. The social and economic implications of this would be a disaster for the country.

‘The Government cannot afford to let confusion over planning policy reduce further the number of permissions given.

‘While the policy vacuum of the past few months is now being filled, it is vital Government gets on and implements its new policies.’

He added that it was crucial councils recognised the housing shortage and allowed developers to build the homes the country desperately needs.

The report, which was compiled by construction information group Glenigan, found that the North of England and the Midlands, have seen the biggest improvement in planning permission levels during the first nine months of 2010, compared with a year ago, although these areas saw the steepest decline during 2008 and 2009.

But in southern England, including London, levels have remained broadly unchanged since last year.

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