Planning delays ‘driving small firms away from housebuilding’

DELAYS and rising costs caused by the planning system are driving small builders from house-building and fuelling the housing crisis, an industry body has claimed.

The NHBC Foundation said a third of small firms have to wait more than a year for planning approval, while nearly 80 per cent have seen a significant hike in planning-related fees in the last two years.

Thirty-eight per cent said a sluggish, costly and inconsistent planning process was posing a major challenge to their business. Another 37 per cent cited the lack of available land at a suitable price has become the most serious obstacle to growth.

The report noted that the number of small firms active in housebuilding continues to decline, accounting for 12 per cent of market share in 2015 compared with 28 per cent in 2008.

Nevertheless, 58 per cent of small builders were optimistic about the future of the industry, with two-thirds expecting an increase in the number of homes they will build over the next two years.

Neil Smith, NHBC head of research and innovation, said: “While the planning process is recognised as a necessary control, small housebuilders and developers continue to express considerable frustration with it. The increasing complexity, time taken to achieve a decision, and the unpredictability and inconsistency within the planning process are slowing the delivery of new homes and, in some cases, causing companies to leave this market.

"Greater certainty and more standardised approaches, clarity concerning the fees and tariffs, coupled with a more responsive service from planning departments would increase predictability and significantly help to speed up the process, thereby increasing the number of homes built."

But councils say the planning system is not barrier to housebuilding and development is mainly being held back by skills shortages in the construction industry.

Figures published by the Local Government Association show nine out of 10 applications are approved and in 2013-14 permission had been granted for 443,265 homes that developers had yet to start work on – a record high.