Current planning system failing to deliver new homes

A recent study conducted by the Competition and Markets Authority (CMA) has revealed that the current planning system is a key reason for under-delivery of new homes.

The study entitled Housebuilding Market Study: Final Report, has identified persistent shortfalls in the number of homes built across England, Scotland, and Wales with less than 250,000 built last year across Great Britain – well below the 300,000 target for England alone.

Around 60% of all houses built in 2021 to 2022 were delivered by speculative private development which has given builders flexibility to respond to changes in the market but widened the gap between what the market will deliver and what communities need.

Concerns were also raised for homeowners who have experienced high or unclear estate management charges for the maintenance of roads, drainage, and green spaces. Additionally, ‘snagging’ issues with new housing have increased over the last 10 years.

Sarah Cardell, chief executive of the CMA, said: “Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them.

Our report – which follows a year-long study – is recommending a streamlining of the planning system and increased consumer protections. If implemented, we would expect to see many more homes built each year, helping make homes more affordable. We would also expect to see fewer people paying estate management charges on new estates and the quality of new homes to increase. But even then, further action may be required to deliver the number of homes Great Britain needs in the places it needs them.”

The CMA has also opened an investigation into the suspected sharing of commercially sensitive information by housebuilders – something that was highlighted in the report and which could be influencing the build-out of sites and the prices of new homes.

Responding to the study, Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “Planning should be enabling homes, better places and competition which benefits not just Britain, but the British consumer. The CMA has correctly identified that the UK planning system does the opposite.”

Rico Wojtulewicz, head of policy, and market insight for the NFB and House Builders Association (HBA), added: “The CMA report has confirmed that a broken planning process is the reason we have a lack of social housing, why big builders build too many of our new homes and SMEs are shut out, that homes are in the wrong places and too expensive, there are some quality issues, and we don’t do placemaking.”