Realist, not conformist analysis of the latest financial, business and political news

Council Planning Permission And Unbuilt Homes

Standard English house, boringly normal – Klaus Hausman

Local government peeps are claiming that it’s not them guv’. Sure, the country needs more houses built, sure there’s a planning process to go through before they are. But it’s not the planning process leading to not enough homes being built:

Councils have hit back at possible government moves to strip them of planning powers to speed up housebuilding by releasing analysis that shows more than a million so-far unbuilt homes have already been granted planning permission in the last decade.

The Local Government Association said its analysis found 2,564,600 units had been given planning permission since 2009-10 and 1,530,680 had been constructed. It said this showed councils were not the block to the government’s target of creating 300,000 new homes a year.

Hmm. Well, you see, there’s this thing called “stock” which is something that businesses think about. We need to have enough whatever in the shed to keep production going until we can restock the shed with whatever. If it’s pencils – to fill out the wage chitties – that we can get from Amazon Prime then we might keep a few day’s worth of pencils in the shed. If it take 3 to 5 years to go from blank field to something we can start selling houses on then we’ll keep 3 to 5 years’ worth of planning permissions in our shed.

The more unreliable deliveries into the shed are then the greater the time period of stock we’ll rationally hold. That planned Soviet system had decades worth of raw materials in it given that factory managers really didn’t know which decade they were going to get raw materials in.

So, housing completions are of the order of 200,000 a year. We’ve a planning system – not, not the grant of planning permission, the whole thing, from virgin field to moving vans turning up – of 3 to 5 years and so the stock of work in progress is – 1 million?

Sounds about right really, doesn’t it.

If field to digging foundations took 3 months, every time and no worries, then that stock would fall. We could even say that the million planning permissions granted and not yet built is actually the proof that we need that it is indeed the planning system which causes the problems. For why would rational builders hold so much stock – other industries are really happy with just in time and all that – if they didn’t have to?

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4 years ago

Why would a capital intensive business not try and turnover the capital as often as possible?

4 years ago

Wrt “For why would rational builders hold so much stock?” – they may keep large undeveloped land banks to restrict the supply of land, stop competitors and keep prices high(?) Also councils are expected to build o many houses, if they are not built developers can then try for planning permission on other land. We see a lot of that in the SE.

4 years ago

While a good proportions of the delays in getting planning permissions through the system are undoubtedly able to be laid at the door of local authority incompetence, one has to blame Parliament ultimately. They create the laws that LAs are attempting to implement (very slowly). If the system didn’t demand so much paperwork or imposed strict time guidelines on LAs to make decisions then the system might function better. But as it is LAs can take as much time as they like messing around with planning applications, and there’s very little the developer can do. I’m involved in a development… Read more »

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