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3rd May 2018
The time taken to get construction projects from planning approvals to a start on site has widened by nearly 14% over the past five years according to Glenigan’s construction market research.
The housebuilding sector attracts plenty of criticism over the time taken between securing approval and construction starting on site. However, Glenigan’s industry analysis suggests claims of landbanking are unfounded. Instead, other sectors are taking far longer.
Over the past five years, the median time for a project to go from an approval to a construction start is 23 months. In 2012, this gap was 22 months but by last year the lag had widened to 25 months.
Glenigan economics director Allan Wilen said: “This research shows that while red tape has been loosened to make planning permission easier, other factors are also part of the reason for the gap.
“Concerns over the economy and the time taken to negotiate a Section 106 agreement are also likely factors, as is the Brexit vote, which was taken in 2016.”
Private Sector Lag Widens
That vote appears to have influenced some sectors reliant on private sector funding, such as hotel & leisure work and retail.
In the hotel and leisure sector, the median time taken from an application being approved to construction work starting on site has extended by nearly a quarter from 2012 to 2017, as operators sit on approved projects.
In the private sector, the gap between a planning application gaining approval and retail sector construction projects starting on site widened by three months between 2012 and 2017.
Retailers have begun to rein in spending as consumers shift towards online shopping and away from the High Street.
As a result, some major grocery chains such as J Sainsbury and Tesco sold off land earmarked for housing, which invariably involves re-submission of a new planning application.
Out of nine building sectors monitored by Glenigan, the area with the biggest gap between planning approval and construction work starting on site is the community & amenity sector.
This sector has suffered from years of cuts to spending at the local authorities, which make up the key clients. Last year, the median gap between approval and construction starting on site was 45 months.
A planning consent lapses after three years. This suggests that swathes of projects in the community & amenity sector are unlikely to be built.
The sector with the shortest time lag is education, where the median time between projects gaining consent and construction starting is 19 months.
However, even here that time has lengthened since 2012, when the median time was 16 months.
The building sectors to record a shortening in the gap between approval and construction starting between 2016 and 2017 were offices, private housing and social housing.
That suggests that the latest landbanking enquiry is likely to absolve the housebuilders again.
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