Large development sites are pivotal to the delivery of new homes in the UK. Strategic developments across the UK could supply enough homes for a quarter of all new households anticipated to be formed over the next 20 years. In London and the South East, the figure is over a third (see Graph 1).
These sites have been hardest hit by restricted development finance in the post-crunch era. Housebuilders and developers have focused efforts on smaller sites as they seek to maximise returns on scarce capital.
Our projections suggest that housing output in England will continue to undershoot the number of new households forming each year. Unless the scale of output is increased, the cumulative shortfall since 2006 will amount to 1.4 million homes by 2022. The viability of strategic development sites will be pivotal to meeting the housing demands of the UK.
Future supply
The vast majority of strategic sites are ‘brownfield’ – that is they have been previously developed – but supply is now increasingly found on major greenfield sites. There has been a shift away from brownfield land for large developments which no longer stack up. Greenfield sites now account for 27% of schemes in our database, by number of units, as shown in Graph 2.
Developers and housebuilders catering to the equity-rich in the housing market are increasingly focussing their efforts on edge-of-town development for family housing. This is a trend that has been evolving post-downturn.
At a time when the city centre flat market dominated in 2007, edge-of town sites accounted for just 37% of the total, while city centre sites made up over 54% (see Graph 3).
Funding – and appetite – for town centre apartment schemes dried up, so that today, while city centre schemes have slipped to less than a third (29%), edge-of-town sites now account for over half of those we monitor (58%).
With so many more strategic sites on greenfield land, there is more of a log-jam of units at the early stage of the more contentious planning process. Some 44% of the unit pipeline on greenfield sites is tied up at a pre-planning stage, compared to 26% of the pipeline on brownfield land (Graph 4).
Many of these greenfield sites are either under option agreement, or allocated in local planning authority strategic housing land assessments, and face lengthy promotion and planning. The new National Planning Framework’s aim is to enable more sustainable development, and it will be necessary to consider the specific requirements of greenfield sites. Given their capacity for new housing delivery it may be necessary to look at ways of streamlining their promotion.
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