English home-building approvals hit lowest since 2014

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LONDON (Reuters) – The number of planning approvals for the construction of homes in England has fallen to its lowest in more than a decade, according to an industry report on Thursday that underscored the challenge facing the new government to boost house-building.

Data from the Home Builders Federation, the industry’s main trade body, showed around 230,000 units received planning permission in the 12 months to June, the least for any 12-month period since 2014.

The figures, which were collated by analysis firm Glenigan, also showed the lowest approvals in a decade for building during the second quarter of 2024.

Prime Minister Keir Starmer, whose Labour Party won a landslide election victory in July, has announced mandatory housing targets for councils in England and planning reforms as part of a push to speed up economic growth.

The government wants to deliver 370,000 new houses across the United Kingdom each year, up from a previous target of 300,000 that was abandoned by the previous Conservative government.

“The steep fall in planning permissions starkly illustrates the challenge the new government faces to boost housing supply,” HBF Chief Executive Neil Jefferson said .

The number of permissions for building sites and for homes in England has been dropping since 2022 while new housing schemes hit the lowest since data collection started in 2006, the HBF said.

While some measures of Britain’s housing market have shown a recovery recently after a cut in borrowing costs, the lack of housing supply has pushed up prices and rents.

Official figures showed rents jumped 8.4% in the year to August. House prices rose 2.2% over the same period.

The Bank of England, which cut interest rates to 5% last month, kept borrowing costs on hold on Thursday as it awaits signs that inflation risks are quashed.