New figures from the Home Builders Federation show a large increase in the number of planning permissions granted for new homes between July and September this year, up 31% year-on-year to 44,251 which also represents a rise of 19% on the previous three months.
This is the highest figure for a three month period since 2007 and the 826 sites for the permissions is at its highest since 2008.
“This is the latest indicator to show how the industry is looking to quickly increase output," said Stewart Baseley, Executive Chairman of the HBF. "We have already seen evidence of a rise in new homes starts and these figures show the industry’s intent to increase and sustain that over the next few years. Developers are building out current sites more quickly and are now looking to invest in new sites and begin development sooner than previously planned.
“The figures reflect the positive principles of the new planning system. They are also a clear demonstration that builders are looking to increase supply as a result of increased market confidence generated by the Help to Buy Equity loan scheme."
However, Duncan Kreeger, director at West One Loans, said that between May and September the government’s Help to Buy equity guarantee scheme had provided only one quarter of the lending made possible by alternative forms of finance, £208 million as opposed to £878 million.
"So far, the first phase of Help to Buy has only helped a few thousand cases of first-time buyers struggling to get onto the property ladder. The real elephant in the room is the sheer lack of homes available on the market," said Kreeger. "It’s becoming increasingly obvious that heating up the pressure cooker of consumer demand will do little to ease the worsening bottleneck of supply.
"But while those in the property industry are desperate to tackle the supply shortage, the real barrier is a lack of finance to create more homes. Conversions, renovations and new developments are all vital in the struggle to keep up with demand. But while mainstream finance is slipping behind, alternative finance is making it easier to find the backing for schemes that can make a solid difference on the ground. Short-term secured loans are often the best way for property professionals to bring these projects to life."