More than 1.4 million homes with planning permission left unbuilt, report finds

More than 1.4 million homes have been left unbuilt by developers over almost two decades, research has found, with experts claiming “market driven house building” will not deliver the 1.5 million new homes promised by Labour. 

A report from the Institute for Public Policy Research (IPPR) think tank, released on Friday (14 February), revealed that developers have secured planning permission for more than 1.4 million homes since 2007, but have not gone on to build them. 

The most common reasons for homes not being built despite having planning permission include “developers wanting to increase the land’s value before selling it on and land banking to slow building rates and maintain high house prices”. 

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As part of the report, the IPPR recommends “strengthening” the planning system in order to support the delivery of house building, rather than removing planning regulations.

The think tank’s recommendations include increasing capacity and funding for local planning teams, which they claim have been “increasingly strained since the austerity years”. It also recommends new legislation to “force developers to build within a certain time frame of securing planning permission, or face sanctions”, as well as creating a new cabinet office team to “produce a national spatial strategy to oversee land use”.

Dr Maya Singer Hobbs, senior research fellow at IPPR, explained that the government “doesn’t need to rip up the planning system to build 1.5 million new homes”, and that many of the issues blocking housing delivery are “not planning-related”.

“Reasons include water shortages, private developers slowing delivery to maintain profits, and a lack of strategic oversight of large infrastructure projects,” Dr Hobbs explained. 

“Market driven house building is broken, and won’t deliver the 1.5 million homes the government has promised.  

“Years of deregulation and cuts to organisations like the Environment Agency means the planning system now operates as the last bastion of defence against bad design, nature degradation, pollution and over extraction of our waterways. We must support local, regional and national planners to do their job.”

“This is not about pitting NIMBYs against YIMBYs, it is about ensuring the government achieves its ambitious targets whilst also maintaining local support and high quality,” she said.

But a spokesperson for the Home Builders Federation (HBF), which represents SME builders, hit back at the think tank’s claims.

They instead urged the government to remove barriers for building new homes.

“Time and again this myth, repeatedly trotted out by those who misunderstand how planning and development works in the real world, has been dispelled by independent reviews, including most recently the CMA,” said the HBF spokesperson. “Having risked investment in land and navigated the lengthy and bureaucratic planning process there is no reason why a house builder would sit on a planning permission when the only return on that significant investment is generated by selling the homes. Any serious analysis of the situation bears this out.

“The government has made positive planning changes made but significant barriers need to be addressed, in particular with regards to the market, before the industry can really press the accelerator and deliver the homes the country needs. House builders want to build homes and if the government can help to address the considerable obstacles to delivery then investment in building new homes will follow.”

Labour has made reforming the planning system a key part of boosting growth, including reintroducing mandatory house building targets for local authorities, targeting disused areas of the green belt, known as the ‘grey belt’, and investing in more planning officers to speed up house building.

Adam Hug, housing spokesperson for the Local Government Association (LGA), said house builders and government must work with local authorities to improve the speed of homes being built.

said: “This report puts a spotlight on one of the key issues the LGA has long-called for government action on – the need to tackle slow build-out rates from some developers.

“In order to deliver the homes we need, government must work with councils and the housebuilding industry to ensure there is a suitable pipeline of sustainable sites, which once allocated in a Local Plan and / or given planning permission, are indeed built out. Councils approve nine in 10 planning applications, but people cannot and do not live in planning permissions.

“Councils must be given greater powers to ensure prompt build out of sites with planning permission, also should be given the support to ensure they have an up-to-date local plan so they can give certainty to residents and housebuilders.”

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