The number of new homes with planning permission hit its highest on record in the year to June, new data has shown.
Some 321,982 new homes were given the go-ahead in the 12-month period, according to a report by the Home Builders Federation and Glenigan up from 278,652 the year before.
However, the report also showed there had been a “slight cooling” in the residential development pipline during the second quarter of this year, following rapid growth in the six months before. The number of homes approved during the second quarter fell 14 per cent from the first quarter, although it was still 13 per cent up on the year before.
It is good news for the sector, which has complained vociferously that stringent planning rules are hampering supply in the UK, thus pushing up house prices.
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Permissions in London rise – but house prices fall
The figures also showed the number of units approved in London fell to 10,646 during the second quarter, down from a record 18,935 in the first quarter.
There have been signs in recent months that demand for new-builds is falling in the capital, particularly in London’s most upmarket areas, where the number of new-builds sold has fallen 55 per cent, according to analysis published last week.
Separate data published this morning showed house prices in the capital fell in September for the first time in eight years.
The figures, by Nationwide, showed prices in the capital fell 0.6 per cent in September compared with the same time last year, making London the weakest performing region for the first time since 2005.
Read more: Why London’s property market is still firmly at risk of a bubble
Help to Buy effect
Stewart Baseley, the executive chairman of the HBF, put the positive planning permission figures down to the government’s Help to Buy scheme, which helps first-time buyers purchase new-build homes.
“The Help to Buy scheme hasn’t just helped 200,000 people buy a home; it has helped them to buy a new build home which is, in turn, boosting supply and generating huge benefits for communities, councils and the Exchequer,” he said.
“While the availability of mortgages has improved since 2013, without Help to Buy, a first-time buyer would once again be forced to find tens of thousands of pounds just to fund a deposit.
“Ultimately If people can buy, builders can build and confidence in demand is crucial to future build rates. The figures show that if demand for new homes remains strong and the planning system processes applications efficiently, further increases in build rates can be delivered in the coming years.”