London saw new home approvals recover from a former drop to reach 6,310 in Q2 2016, but this progress could be short-lived, according to the latest London New Homes Monitor from Stirling Ackroyd.
Out of a possible 8,280 new homes that could have been approved across the quarter, 6,310 – or 76% – were granted permission.
This means there has been a 46% quarter-on-quarter improvement since Q1 2016, which saw 4,300 new homes given approval.
Westminster proved the most proactive London borough – approving 1,720 new homes. Overall, the inner borough allowed 99% of all new home applications it received, the highest rate in Greater London.
Andrew Bridges, managing director of Stirling Ackroyd, said: “London has had a tough time lately, as Brexit injected a dose of uncertainty into the property market. In spite of this, the number of new home approvals improved in the run up to the result. There may still be an impact to come but for now, this pick-up is a sign that London’s property market is resilient. It’s a new game of unknowns – and London could emerge a winner.
“Westminster is soaring ahead in terms of approvals and applications, but these are unlikely to be affordable for the typical Londoner. Many in the Capital are left feeling let down as affordability drives them further away from a home of their own.
“A new Housing Minister means new rules though – and London could be set for a shake-up. The revival of a Minister for London could bring some reassurance to developers, and buyers, who are hoping for a pro-building government under Theresa May. Realistically, however, it’s more likely to be business as usual.”
Q2 2015 saw 8,063 new homes, out of a possible 10,662, granted permission. By contrast, both decisions and approvals fell year-on-year with just 6,311 allowed in Q2 2016.
Bridges said: “We keep on hearing negativity when it comes to housing in London: not enough space, not enough money, too much nimbyism. In fact, there’s plenty of room and sufficient progress isn’t being made on a yearly basis. Our research suggests space for up to 570,000 across the next 10 years. Sadiq Khan may be keen to protect Green Belt sites but good development is possible there too, and we need to think the politically unthinkable to solve the housing crisis.
“There’s a clear and difficult road ahead to solve London’s housing deficit. A big challenge is how to ensure the government’s promise of one million new homes and Sadiq Khan’s promises of over 50,000 in London, are delivered now Brexit is a reality. A more efficient planning system is the place to start. Crucially, planning reforms are still on the government agenda for now – and they need to stay there.
“Overall, more resources and time need to be committed to achieve the number of new homes London needs. Having a new home can transform lives and London has always been an aspirational city.”
Newham rejected 92% of possible new homes across Q2 2016, recording the lowest Greater London approval rate, and meaning just nine new homes were approved in the borough over a three-month period.
By comparison the London approval average was 76%, with only 13 out of 33 boroughs surpassing this. However, this does mark an improvement from Q1 2016, during which the average approval rate dropped to 61%.
Following closely behind Newham, were Bromley which approved just 23% of all new homes applications and Islington, who approved just 36% of potential new homes.
Merton similarly saw a large proportion of new homes approved, with 88% being granted permission by the borough’s planning departments.
The East of London amplified its planning efficiency, as Tower Hamlets – a new build development hotspot – permitted 87% of new home applications. Havering, in the far East of London also approved 87%, building on the developmental strength of the City fringes.
Bridges said: “The East of London appears the most reliable area when it comes to tackling London’s housing crisis. Planning is more lenient, there’s less resistance to new developments and the area keeps growing in vibrancy and significance to the London economy. East London’s impressive tech sector is just a starting point – and success will continue to ripple around the surrounding locales. More and more, people are wanting to live in Shoreditch, Dalston and Hackney Wick – and this enthusiasm is driving developers to the area.
“It’s great to see overall progress but certain boroughs are slowing things down – Newham has seen a rigid approach to planning in Q2, which will need to be reversed if a consistent approach is to be enacted across London.
“Again, the ugly inner/outer divide has reared its head – with outer London remaining defiant against new homes and new developments. Unfortunately for London, consistency is key to solving the planning equation. If planning departments are to embrace a new strategy, some tough love from central government might be needed. And Gavin Barwell may be the man to do it – only time will tell.”