UK's Homebuilding Takes a Dive: A Decade-Low Forecast

Image credits: Tierra Mallorca / Unsplash

This week we dive into the latest figures from the Home Builders Federation (HBF).

The HBF's Housing Pipeline Report has revealed a significant drop in planning consent for new residential property schemes. In Q3, planning permission levels dipped by 2%, totalling 2,778. That's an 18% decrease compared to the same period last year.

In fact, the first nine months of 2023 saw consent granted for 198,121 new homes, a decrease of 18% from last year. The majority of these approved schemes (91%) were larger developments with 10 or more units.

But it's not just the big projects that are feeling the pinch. Smaller new-build projects, self-build schemes, and conversions of non-residential properties have also seen a decrease in approved units.

The number of private sector housing projects with three or more units gaining approval fell by 8% quarterly and 21% annually. Social housing projects didn't fare much better, with a 16% quarterly fall and a whopping 44% decline on 2022.

Regionally, the picture is mixed. The North West, Yorkshire and the Humber, and Scotland saw double-digit increases in unit approvals. However, the North East, East of England, London, and Wales experienced significant falls.

The report suggests that England's housing supply could hit a nine-year low in 2024. If the current 15% drop in planning permissions translates into completions next year, housing supply could drop below 200,000 a year. Some UK property market commentators are predicting that completions will drop to circa 160,000 which would be the lowest for decades.

LINK TO FULL REPORT: Housing Pipeline Report Q3 2023 - Published December 2023 (hbf.co.uk)