Navigating this resource

This page groups together press releases from the last few years and attaches links to the data used to inform our viewpoints. While the housing, planning, and productivity crisis are rarely disputed, the extensive level of data backing it up is fragmented. We hope our efforts not only give readers the confidence that the NFB is informed ‘by the science,’ but also shows that we are open to challenge and merely want to help everyone interested in this debate to become more informed.

How do we solve the housing crisis?

We build more homes of course! Those homes must be all sorts of tenures and delivered by a diverse development sector, from local authorities and self builders to Small and Medium sized builders (SMEs) and national companies.

To achieve this in practice we will need to change how we use land and therefore planning reform is key. Some people wrongly think planning reform means weakening regulations and making housing supply a free for all but that’s not what builders are asking for.

For a start, planning isn’t just getting a planning permission, planning is also how sites are allocated in local plans, local plans themselves and their local policy. It is the ‘statutory consultees’, such as Highways, who set their expectations. Bodies who influence planning conditions, for example, to provide dog walking paths. Planning conditions that need satisfying and signing off (at a cost) before shovels can go into the ground. And ‘planning gain’, which funds affordable housing, open spaces, parks, schools, roads, health etc!

It’s even the politics which set density low, cause delays so planning committees can discuss or vary something which already meets regulation and ultimately takes powers away from planners, who are employed as the experts!

Have a go at obtaining planning permission with our Text Adventure!

Click here to play our interactive planning-themed game. Download the HTML file using the button in the top left corner.

Very simply, planning reform means making sure the planning system is fit for purpose and creates great places without compromising outcomes but of course before we think about what we build, where and why, we need to understand how we got here!

Do we have a housing crisis?

Yes, we do. The housing crisis is not just about raw housing supply but a mixture of issues where we do not have enough housing, either in the correct places, tenures or types. The planning system works against organic growth!

This means we have too many small apartments which do not suit families. Not enough homes for older people looking for independent, semi-independent living, or full care. Too few smaller homes for those not wanting multi-occupancy housing. Additionally, housing which isn’t located near employment, education, family, good transport access, or retail. There is a lack of social housing and no opportunities for self-builds.

A few things have happened over the last 30 years:

• Urban areas, especially London, started building flats, not houses. With the capital building 1 and 2 bed homes, while other regions focused on 3 and 4 bed properties.
• Private companies built on average 10,000 fewer homes annually between 2000 and 2023, than between 1980 and 2000. Over that same period, councils built almost 12,000 fewer homes a year, but only 6,300 more housing association homes.
• Demographic changes, with higher levels of lone parents, more people living alone, a greater number of children living with parents, and higher levels of people moving from non-metro to metro areas.

We also saw average regional house prices rise beyond many people’s financial reach, with house prices of houses, particularly detached homes, rising the most.

The Government, through the ‘Standard Methodology’ and ‘Housing Delivery Test’ introduced targets and penalties for failing to deliver minimum numbers, but unfortunately, in regions with the least affordable housing – London and the South East – more than 40% of councils missed those targets.

When the Government announced they were going to remove their minimum supply targets, some councils paused their local plan updates and when actually scrapped, a number of councils began scaling back their housing supply ambitions.

In a world where the planning process means it can take many years to get spades in the ground – 1.5 years for 50 homes, 5.1 years for 2000+ homes – you also create a situation where those tasked with building our homes are the ones who take the greatest risk to navigate a broken planning process.

Planning is broken

As we highlighted at the start, planning isn’t just getting permission but having a site allocated by the local planning authority (of which we have over 360), understanding any local rule variations, satisfying numerous conditions as part of planning, negotiating legal agreements, paying planning contributions before you sell anything, getting approval from Statutory Consultees such as Environment Agency and Highways, paying for certain mitigations before works begin, paying for conditions to be signed off, and suffering price rising delays caused by planning committees (often without any planning or building experience).

After all of the above (and more) are satisfied, you can start building!

However, every year, local variations grow in number (some exceeding national standards), new taxes are introduced by government, national planning policies get consulted on for reform, and the system becomes more bloated, less efficient, more delayed and more expensive, with no funding increases tied to outcomes.

• 42% of all planning applications had Extension of Time (EOT) requests and when you strip out these EOT’s, in 2024, only 20% of applications were approved in the Statutory 13-week period.
• Despite delivering more quickly, the number of consented sites between 50 and 100 homes has reduced by 52% since 2017, a similar decrease seen on sites of between 20 and 50 homes.
• After rising by 20% in 2017 but planning performance getting worse, in 2023 planning fees rose by 35% for Major sized developments (10+ homes) and 25% on all others.
• Only 10% of planning departments are fully staffed, and 13% have fewer than three quarters of posts filled.
• 66% of Local Planning Authorities believed Section 106, a negotiated planning contribution, delayed housing. Legal costs and delays were a concern, and so standardised templates and agreements were suggested.
• Statutory Consultees delays considerably impact development, the 2022/23 Environment Agency report stated that more than 90% of the reasons for not meeting their 21 day response timescale was due to resourcing issues or error.
• Lost planning appeals cost the tax payer money, between 2018 and 2023, London councils paid £2.3 to developers in costs, after losing appeals on Major developments.
• Between 2017/18 and 2023/24, 37% of refused planning appeals were eventually granted. This means 63,729 might not have gone ahead if those meeting regulations didn’t take legal recourse.
• Residential land values continue to rise

In 2023, more than 60% of local authorities did not have an adopted or up to date local plan.

The data doesn’t lie. Planning is uncertain, and broadly discretionary. Local politics impacts delivery. Local plans are out of date. Statutory consultees are making planning departments looks bad. And the time taken to get permission, sees the costs of delivery spiral.

This is just a small level of concern. We have not covered how local planning allocates sites without permissions at the expense of those which do or can deliver, that smaller sites deliver more affordable housing, or that developers pay for almost 50% of affordable housing, plus £2.8bn collected from developers is sitting in council coffers, either unspent or unallocated.

All this matters, not just because it ensures lower productivity and harms the UK population while wasting billions, but because it impacts who can build, what sized businesses dominate, the type of places we live in, and creates worse societal outcomes.

Who builds our homes and why it matters!

The big builders now deliver most new homes in England and it makes sense because the high risk, politically driven, broken planning process means that only they can afford to do so.

Since 1977, the number of small builders (under 100 homes annually) has decreased by 80%, medium builders (100 to 2000 homes annually) by 53.6%, and national builders (2000+) by 7.7%. If you are a small or medium sized builder (SME), the housebuilding industry is a difficult place to start or operate.

The Competition and Markets Authority (CMA), Housing Market Study, identified that:

• Sites of up to fifty homes cost 3.5 times more to take through planning than sites with 500 plots
• Large sites are being allocated in Local Plans at the expense of smaller ones
• Planning delays, finance raising powers, and land access costs put SMEs at a disadvantage
• A broken planning process reduces competition, which in turn lowers quality, innovation, and employment opportunities

Historically, SME housebuilders would purchase land and take it through the planning process themselves but the costs, delays and allocation process (achieved via a ‘call to sites’ to match potential housing supply with housing need) means it is easier to purchase from landowners and promoters who have achieved outline planning, even if this means paying a premium and then needing to make the permission viable. To example this, the number of planning application are considerably down since 2009, despite the UK going through an acute housing supply crisis.

Housebuilders do not typically submit planning applications if they are unlikely to get planning permission. This is because the cost of such a strategy is incredibly high (tens of thousands) and most builders operate hand to mouth, pre-application meetings can be used to discuss likelihood of application success (though advice is not legally binding) and because local plan site allocations form the basis for permissions.

Every government claims they want to support SMEs, but in practice, none do, likely because housing supply keeps increasing. As SMEs are increasingly unable to cope with the costs of planning and continue to get left behind, they eventually leave the sector or close their businesses.

From a strategic perspective, this creates considerable national concerns:

• SMEs train 8 in 10 construction apprentices, and make up 90% of training capacity
• Smaller sites, the bread and butter of SMEs, deliver proportionately more affordable housing.
• SMEs are the predominant rural employers (72%), and in 2022, construction was the third largest rural employer.
• NFB research identifies that most members directly employ or use favoured supply chains and prefer to employ within a 20-mile radius.
• In Scotland, over 90% of SME development is undertaken on brownfield sites in the main urban centres, compared to just over 70% for large home builders. a statistic which correlates with anecdotal data from House Builders Association (HBA) members
• Of the 87 HBA members surveyed, none had sold their freeholds to third parties
• By their nature, no two SMEs are the same, which leads to no standardised housing types. In turn this ensures greater levels of design variations.
• The 2022 HBA Housebuilders Survey identified that no respondent identified cost as a barrier to new apprentices, but all highlighted work pipelines or planning uncertainty as barriers
• SMEs are the first to implement new regulations, such as higher energy efficiency, because these are typically introduced to new permissions, rather than retrospectively added to existing permissions
• SMEs also act as contractors and so have capacity for self-build, social housing, registered providers, co-ops, and Community Land Trusts.

The challenges facing SMEs are clear and well exampled in numerous government reports, for example, the House of Commons ‘Future of small and medium-sized housebuilders’ research briefings. Without them we cannot tackle the skills crisis (which extends into retrofit), identikit housing will be more likely, local employment and investment decreases, and the benefits of competition, including pricing, are much harder to achieve with constant regulatory cycles.

We need the large builders, but without our SMEs, we will never meet our broader needs, and leaves the industry more exposed to economic shocks.

The housing crisis can be solved but we must first accept what it is, who the key players to solving it are, and how to bring about improvements.

Further Reading

First port of call for any policy maker should be the NFB Manifesto, ‘Supporting Construction to Power Growth’, which not only identifies how to fix the housing crisis but also outlines the planning reforms needed to achieve sustainable growth across the entire nation.

The NFB website is full of member led viewpoints but the following links will take you to a host of topics presented by our policy team:

• Right to Buy reform,
• Right to Buy: Whose fault,
• Why Housing First is a supply issue,
• Are councils failing to deliver?,
• Building in Biodiversity,
• Modular and offsite cannot fix the housing crisis.
• Housebuild Magazine
• ‘Planning for the Future’ consultation response

Compiled and written by Rico Wojtulewicz, Head of Policy and Market Insight for the NFB