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Regional house building outpaces London

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Number of planning consents rocket across the UK but more than half of regions experience drop in commercial permissions

The largest growth in house building approvals over the past 12 months has been outside London, according to new figures.

The latest statistics from industry tracker Glenigan confirm a thriving residential market, with the number of UK planning approvals granted in the 12 months to October 2013 up 31 per cent.

Wales led the pack, recording a 71 per cent rise, followed by the West Midlands (55 per cent).

The East Midlands and the East of England experienced a 49 per cent surge, while planning approvals in the North East and North West were up 47 per cent.

Northern Ireland was the only zone to record a decline in the number of residential planning approvals, dropping by a third.

In contrast, the offices and commercial sector struggled – planning approvals fell in seven of the 12 regions surveyed, with the East Midlands faring the worst (31 per cent decline).

Wales experienced a 27 per cent drop, while the North West suffered a 20 per cent fall.

Tom Crane, an economist at Glenigan, said the boom has been partially driven by the Help to Buy and Funding for Lending schemes, adding: ‘Housebuilders are still looking to win approvals and ramp up the pace at which they build out their new and existing sites.

‘Perhaps this will slow down towards the end of next year, but it will continue for the next couple of quarters.’

Amir Ramezani, director of Avanti Architects, insisted the figures should be treated with caution until there are more ‘concrete indicators of a sustainable recovery’. He said: ‘Any sudden hike outside of London may be the product of a small statistical pool arising out of previous low activity and the degree of stagnation we have witnessed over an the extended period of time. A truer picture may lie in between rises in residential planning consents and falls in commercial approvals.’

We must ensure that this huge growth is not followed by a dumbing down of design

Meanwhile, Cathedral Group’s Richard Upton said, in parallel with the upturn in the property market: ‘We must ensure that this huge growth is not followed by a dumbing down of design in the construction process, or we will deliver a housing boom that destroys the grain and skyline of the country.’


Nick Johnson of Nick Johnson Consulting: ‘What we’re seeing is a land grab not a beginning of a solution to the shortage of supply. It represents a determined attempt by quoted house builders to add to their already swollen land banks taking advantage of a relaxation in planning rules in response to Local Authorities designation housing land for release in Local Area Plans.

‘Persimmon, Barratt and Wimpey are still trading at a two- year high which has been bolstered by the practice of banking consented sites in a market where demand is high and supply is restricted. 

‘The real figures that need analysis are the housing starts, disaggregated by tenure and geography. This will, I’m sure, show a distinct lack of starts outside London where the availability of funding still remains the fundamental challenge, both for lender and developer.’

Peter MacAllan, head of development funding at Knight Frank Finance: ‘It’s a fairly bright picture for the UK housebuilding industry, with more funding providers in the market and funders prepared to look at sites without planning permission in place. 

‘In the last 18 months we have seen a huge influx of foreign equity funding the development of, mostly London, residential sites.  A number of foreign banks, particularly from South East Asia and the Middle East, have funded local investors in the acquisition and development of large multi-unit schemes.

‘However, in the last few months, private and institutional US investors have begun to dominate the scene. Attracted by the near equity returns residential lending has given and the security of a first legal charge on London assets, we have seen the number of US entrants more than treble in the last 12 months.’


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