The planning system is not delivering housing where need and market demand is greatest. Our analysis shows that the number of homes planned by local authorities in England is likely to result in a shortfall of around 36,000 homes a year, unless local planning authorities take greater account of housing need both within and beyond their boundaries.

Failure to cooperate on housing requirements across local authority boundaries is therefore likely to result in an accumulated planning shortfall of 180,000 homes over the next five years. This is before we consider what housebuilders and other developers can deliver relative to these targets.

Last year building starts reached 136,000 in England. However, according to analysis undertaken on behalf of the Town and Country Planning Association (TCPA), we should be building at least 240,000 new homes a year in England to 2031. The greatest requirement is in London and the South East where the property market has been strongest.

However, our analysis shows that these are the areas where the deficiency in the number of homes being planned is likely to be the greatest. Housing targets adopted so far are 80% of the corresponding SHMA figures across the country. A continuation of this trend would result in a shortfall of 26,000 homes a year in the south and east of England, including London. This figure equates to 74% of total housing shortfall for the whole of England.

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^{Source: Savills Research, Town and Country Planning Association}

London and beyond

Of a total 114 local authorities in the south and east of England, 31 (27%) have neither an adopted local plan nor a recent SHMA published since the NPPF was introduced in 2012.

Yet these local authorities currently accommodate a quarter of all existing households in the region and will face pressure to meet the requirements for housing emerging from London and surrounding local authorities.

The 31 local authorities without post-NPPF local plans include Sevenoaks, Elmbridge and Epping Forest. These are strong housing markets where over 50% of the authority is designated as Green Belt.

Shortfalls are less pronounced in the North, Midlands and west of England. Assuming targets adopted by the local authorities that still lack a post-NPPF plan are 80% of their SHMA, the annual planning shortfall could amount to 7,349 homes in the Midlands and west of England and 2,038 in the North.

Despite the increase in planning permissions towards 200,000 homes per year in England last year, 20,000 were granted through appeal (see p.8). A closer analysis reveals persistent problems in maintaining an adequate supply of land for housing and that this problem is most notable where the level of housing need is greatest.