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Regional growth continues to outpace London

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New figures showing the number of applications submitted last year reveal that the regions are catching up with London

According to the latest figures from industry tracker Glenigan, housing approvals across the UK were up by 17 per cent on the previous year’s numbers, with the biggest booms outside the capital.

The new statistics echo the results of the latest RIBA Future Trends survey which suggested the economic recovery is spreading out from London and the South East to the rest of the country.

The East Midlands surged ahead with the number of residential schemes given the go-ahead up a massive 62 per cent from February 2013. Approvals in Wales were up by 38 per cent and the East by slightly more than a third.

The only region to see a decline is Northern Ireland, which has seen planning approvals for housing drop by 31 per cent in the past year.

Although residential planning approvals across the regions are up, these have not yet translated to construction starts. Scotland, Northern Ireland, Yorkshire, Wales, East and the South West have all seen a significant drop in the number of housing projects starting on site.

The commercial sector is continuing to struggle with the number of approvals down by four per cent nationally. The number of approvals for offices has dropped in half of the UK regions with the East Midlands faring the worst, experiencing a drop of 47 per cent.

The figures have revealed a north-south divide between the regions for the office and commercial sector. The number of projects actually starting on site is in decline in the south whilst the north is booming with the North East seeing commercial starts up 24 per cent and Northern Ireland up by a whopping 50 per cent.

Industry figures have warned that the regional growth may look rosy but that it is coming from a low starting base.

Roger Burton, chair of the RIBA North West practice committee said: ‘Growth of 30 per cent and 27 per cent respectively may look encouraging but is from a low base.’ 

He added: ‘This considerable growth in the residential and health and leisure sectors is of course welcome and we would hope to see this translated into construction activity in the forthcoming years – recognising that the planning approval may only represent around 25 per cent of the architects role.  However, it would be good to see a balance in the numbers, with the negative growth of the office and commercial sectors a concern for the future.’

Tom Crane, an economist at Glenigan commented:  ‘The figures do show the regions outstripping London in terms of growth, but that’s in part because approvals picked up much more strongly in London from mid-2012 than the regions, so now they’re catching up while London is relatively stable.

‘I think what we’re now seeing in terms of increasing starts and activity in the capital is a result of increased confidence to press ahead with schemes once they secure planning, we’ve seen falling numbers of projects being mothballed and it seems that projects are moving from planning to start on site a bit more swiftly now the conditions are right.’

Andy Avery, director at Buttress Fuller Alsop Williams Architects added: ‘In general terms the figures would seem to tally with our perception of the trends, albeit perhaps earlier than our direct experience.

‘The extent of some of the percentage changes is surprising, and where the regional figures show a significant increase, these would seem to be reflective of the famine of the preceding years rather than return to a boom scale feast – which still feels to be a long way off.

The figures reflect the famine of previous years rather than return to a boom scale feast

He added: ‘The relative stability in the London figures would support this view on the low reference point of the region’s preceding year. There is a sense that the current ongoing year’s figures will reveal more and I would anticipate a further rise in approvals particularly in the residential sector.’

Mark Thompson, managing partner at Ryder, which has offices in Liverpool, Newcastle, Glasgow and London, added: ‘It is good to see residential is on the up nationwide.  London operates at higher rates than the rest of the country so I’m not surprised at the more or less neutral position there.’

But Simon Rawlinson, head of strategic research at EC Harris, said the differences in scale between residential and commercial projects could be swaying the figures: ‘Glenigan tracks numbers of consents rather than the value of consents, so you would expect a big increase in the residential sector due to the small size of many sites. By contrast, the data for offices and commercial shows a much more mixed picture, which could be interpreted as a slowdown in activity and a reduction in the development pipeline. However, commercial office development is on a relatively large scale, with a small number of developments representing a large volume of design and construction work.’

There’s clear evidence office workload picked up in the past 12 months even regionally

He added: ‘Based on a wider set of market data, including levels of investment, activity in the pre-let market and new orders, there is clear evidence that office workload has picked up in the past 12 months, even in regional cities. As business confidence increases and funding becomes easier to obtain, we expect to see more office development being brought forward in many UK markets both inside and outside of the South East.’

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