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6th September 2012
The Prime Minister has put the construction industry at the heart of the Government’s plans to revitalise the stalled UK economy. A raft of measures have been announced; to temporarily relax planning controls on minor developments, underwrite the provision of new private rented accommodation, ease the burden of planning gain on new private sector developments, tackle perceived inefficiencies in the planning system and to provide additional funding for new affordable housing and for the Firstbuy scheme. Using Glenigan data the Government identified 75,000 potential new homes currently stalled due to sites being commercially unviable.
The measures to encourage developers to bring forward sites for development will be welcomed by the industry. As reported by the Financial Times on 9th September, the latest data compiled by Glenigan for the Home Builders Federation (HBF) reveals a disappointing 4% decline in the number of private and social sector homes securing detailed planning approval (on sites of 10 or more units) during the second quarter of 2012.
Furthermore a separate report researched by Glenigan for the Local Government Association identified some 400,000 dwellings with planning approval that were on projects that were either under construction or had yet to start on site. The planned renegotiation of section 106 agreements and the additional Government funding should help unlock stalled schemes and accelerate the delivery of projects currently on site.
The Government’s proposals to temporarily relax the planning controls on home extensions and other small scale developments is intended to provide a direct boost to construction activity and the wider economy in the run-up to the General Election.
Glenigan figures quoted by the Telegraph on 4th September highlight the potential impact that an increase in such work could provide to industry workload. Home extensions typically account for seven out of ten of all residential planning approvals.
At 85,500 the number of all residential approvals during the past five months was 13% up on the preceding five months. This coincided with the decline in larger new build projects (10 or more units) during the second quarter of the year analysed in Glenigan’s report for the HBF. The overall rise points to renewed interest among existing homeowners to invest in their homes. The planned relaxation in planning controls could potentially accelerate this trend.
The measures announced by the Prime Minster include:
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