District-level planning authorities in England have reported a significant decline in applications for planning permissions and granted decisions in the first quarter leading one expert to lay the blame on the impact of Brexit.
In the period between January and March 2023, planning authorities received 96,000 applications, representing a 13% drop compared to the same quarter of the previous year. Likewise, the total number of planning permissions decided also fell by 9%, from 95,580 to 87,200 over the same period.
Despite the lower number of applications, the percentage of applications granted decreased slightly. Of the 87,200 applications decided, 75,000 were granted — an 11% decline year-on-year. Consequently, the grant rate fell by one percentage point, from 87% to 86%.
On a positive note, there was a slight improvement in decision-making speed for major applications, with 89% being decided within 13 weeks or the agreed time — an increase of three percentage points from the first quarter of 2022.
Cliff L’Aimable, managing director at Building Control Surveyors, said: “Uncertainty caused by labour shortages following Brexit, rising interest rates and the steeply climbing costs of materials, including energy costs, have made a number of projects we handle non-viable, with many investors now not willing to take the plunge into property development.
PR platform Newspage asked experts for their take. Here’s what they had to say:
Matt Baldock, director at Charles David Casson:
“We are finding that for the first time in many years it is actually cheaper to move than to extend. Moving costs, mainly Stamp Duty, have previously made people who need a bigger property look to extend but both labour and material costs have gone through the roof since the pandemic, while Brexit has also had a part to play, especially on the labour and importing materials front.
“For most mid-market family homes, extending was always largely a ‘needs must’ cost-based solution with compromises still made, so the fact that it is now cheaper to move means people can try and find that fresh new home that suits their needs better and can be justified financially.”
Justin Moy, managing director at EHF Mortgages:
“It was inevitable that the cost of raw building materials, high mortgage interest rates and the general cost of living challenges have had a negative impact on home improvement work.
“Whereas borrowers have traditionally added this cost to a typical remortgage when their product was due to renew, given that many have no option but to take a product transfer with their current lender, unfortunately this has also meant that additional borrowing is off the agenda for the time being. Once the economy improves, confident homeowners will look to these opportunities again.”
Joe Garner, co-founder & managing director at Joe Garner Consulting:
“Development deals no longer stack. Gross Development Values are down, land prices remain high and just about every other cost has risen from raw building materials to the interest charged on debt.
“Coupled with the faltering, failing planning system, it is Armageddon for house builders, main contractors and many sub-contractors as well as professional service providers operating in the new build residential housing market. Planning has become an expensive, long-winded game of roulette that many are no longer willing to play.”
Edward Checkley, managing director at Advias:
“The cost of building has significantly increased, higher interest rates are increasing the cost of borrowing and a slowing housing market is reducing anticipated sales figures.
“Development sites no longer stack up, unless landowners are willing to take a big haircut. Let’s also not forget that Community Infrastructure Levy fees by local councils are taking a significant chunk out of these developments.”
