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‘Record pre-application fees are making it impossible for us to build affordable homes’
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In light of Chancellor Rachel Reeves recent pledges on housing, many SME housebuilders are hopeful for the future of the sector, with housebuilding evidently high up on Labour’s agenda. However, with pre-application fees now at an all-time high in regions such as Dorset, many are asking how Labour’s ambitious targets for affordable housing will actually be met, and whether the support will help SMEs. 

David Cracklen, Director of AJC Group, an affordable housing partner for housing associations and councils in the Wessex region, has expressed grave concern over the costs of planning applications, and the implications this has on the affordable housing supply. 

David Cracklen, said: “Planning application costs have doubled in places such as Winchester and pre-application fees have gone up by over ten times  in Bournemouth, Christchurch and Poole, adding no benefit to the housing sector in general, and further adding to the financial pressures for SME developers. 

“Once the application progressed, often after being hugely delayed, further hurdles are added, including: BNG requirements, Phosphates/Nitrate mitigation, construction cost rises, interest rate rises, labour shortages, and the general rise in validation requirements…the cost to submit any type of planning application threatens to put further  SMEs out of business. 

“The House Builders Federation HBF reported that there are now eighty-five percent fewer small home builders than there were a generation ago. This is an incredibly worrying statistic, not only for SMEs, but the future of house building in the UK. A recent poll of two hundred SME housebuilders found that ninety-three percent are now considering scaling back their operations – something needs to be done. *

“The Chancellor’s pledges do seek to help the housing industry, by reducing pre-application planning costs in the first instance and reviewing it at a more local level. Further relief will be offered with the reform of the National Planning Policy Framework, as well as the introduction of mandatory housing targets. Investment and a tightening of targets for local authorities will aid in resolving planning applications in a timely fashion. 

“We hope that this is just the start, and that the newly elected Prime Minister Sir Keir Starmer and his government will continue to offer support to SME housebuilders, and by reviewing the local planning system is a way to do that. Changes to prevent poor local planning decisions being made will help necessary planning applications go through with more financial ease. 

“Currently, we are experiencing the imminent downfall of the SME housing sector, and by making improvements to planning and increasing investment, it will drastically help those who provide the backbone of housing supply in the UK.” 

Posted on: 10th July 2024
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