Current planning permission rate would not meet London's housing target

The Greater London Authority’s strategic development plan, the London Plan, sets housing targets totalling 42,389 new homes per year for the London’s boroughs. A study (8-page / 1.12 MB) by estate agent Stirling Ackroyd analysed all planning applications received and granted in London in 2014 and concluded that only 27,470 new homes were granted planning permission last year.

The study estimated that London would only reach 65% of its current target if the existing approval rate continued. In the last quarter, it found that 6,780 homes were granted planning permission out of a possible 8,632 homes, which was only 79% of the target approval rate.

The authors found that Tower Hamlets Council granted permission for the greatest number of new homes across London in the final quarter of 2014, approving 1,197 new homes in that period. In the same period, permission was granted for 682 new homes in Croydon, the borough with the second highest number of homes approved, and for only 11 new homes in Lewisham, where permission was granted for the fewest homes.

Although Tower Hamlets granted permission for the highest number of new homes, the study said this represented only 65% of the applications received. Greenwich and Hammersmith and Fulham Council granted planning permission to 97% of the applications received, the study found.

Planning expert Alexis Coleman of Pinsent Masons, the law firm behind Out-Law.com said: "The high approval rating is encouraging and a useful indicator of likelihood of obtaining planning permission for developers coming forward with planning applications in London. The approval ratings and the figures identifying the London boroughs granting permission for the most homes accord with our recent experience with major schemes in a number of London Boroughs, including Tower Hamlets, Hammersmith & Fulham, Croydon and Greenwich."

"These are really worrying statistics," said Marcus Bate, a planning expert at Pinsent Masons. "The London Plan housing target is at least 20% too low. Any shortfall in planning approvals against an artificially low target is likely to exacerbate the problematic long-term trend of housing demand outstripping supply in the capital."

The number of homes actually reaching completion stage was found to be even lower, with only 18,440 homes completed in 2014. Even though London did not hit the recommended target, the authors said the capital had seen an increase in finalised homes which grew 30% from quarter three to quarter four in 2014. London was also found to have twice the acceleration of completed homes compared to the rest of England.

"Whilst the significant increase in the completion of homes in the final quarter of 2014 is a promising sign, the report’s findings that the approval rate falls short of meeting London’s housing target serves as a reminder that there’s still a long way to go to address the housing shortage in the capital. There is a good reason why housing is shaping up to be one of the big issues in the upcoming election," said Coleman.