Britain’s ‘Phantom Homes’: A third of new homes granted planning permission have not been built

Housing charity calls for "planning permissions" to be replaced with "planning contracts" to target slow building

324,000 homes remain unbuilt in England & Wales, despite being given the go-ahead by planners in the past five years, according to some new research by housing charity Shelter. That’s nearly a third of the total number of new homes granted planning permission.

It’s estimated that just 68% of homes with residential planning permission have been completed over the past five years. The stats are even more acute in London, where nearly half of permitted homes remain unbuilt.

Shelter flags up that, in the same time period, profits of the country’s top five housebuilders have soared by 388% to a total of £3.3bn in 2016…

The charity allowed for a one-year time lag between a home getting the green light, and the build being completed when making its calculations, arguing tat that should be enough to get a building up and on the market.

Shelter claims that the current planning system “encourages” housebuilders to drip-feed new units for sale so as to avoid flooding the market. It wants the government to effectively impose taxes on developers which do not bring projects forward in a timely fashion.

One way of doing this would be to replace “planning permissions” with “planning contracts” as part of a “New Civic Housebuilding model” – meaning that developers “would have an obligation to actually start building unless circumstances are exceptional”.

Anne Baxendale, head of communications, policy and campaigns at Shelter: “Housebuilders are trickling out a handful of poor quality homes at a snail’s pace meaning there are simply not enough affordable homes and ordinary working families are bearing the brunt.

“While people across the country struggle with eye-wateringly high housing costs, developers’ profits are soaring into the billions. Time and again we hear the ‘red tape’ of the planning system being blamed but the real problem is a system where developers make more profit sitting on land than they would by building homes.

“It’s clear our housebuilding system has failed the nation but the government can turn things around by supporting a whole new approach. Shelter’s New Civic Housebuilding model listens to the needs of communities and gives more powers to councils to get developers building the high-quality genuinely affordable homes we need.”