London housing targets gets a boost

The managing director of estate agent Stirling Ackroyd said in the first quarter permissions accelerated by 73 per cent, 11,870 homes were given planning permission across 1,553 sites.

“New homes are on the way. Having stuttered for so long, London has developed a clear housing deficit. If this pipeline of new property comes to fruition, it will represent exactly the heavy-duty, industrial scale of response needed to start filling the housing hole,” Andrew Bridges said.

According to the estate agent’s study of planning applications across the capital’s 32 boroughs and the City of London approvals represented 82 per cent of the 14,400 total homes applied for in Q1.

The number of housing starts in the quarter stood at 38,200 – just short of government housing targets but up by 54 per cent year-on-year.

According to the study official targets were within grasp with a “boom” of approvals in the capital – now at rate of 47,460 a year.

However the acceleration in the initial stages of the house building process has yet to translate into completions.

The opening quarter saw just 5,420 completed homes, which annualises translates to a less impressive 21,680 new homes per year, according to the study.

Tower Hamlets, Greenwich and Camden were the boroughs that led the resurgence in approvals, the study revealed.

In the opening quarter of 2015, Tower Hamlets approved 2,940 homes followed by Greenwich with 1,930 homes.

The worse boroughs were Lambeth, with 26 homes approved; Kingston, with 21, and Barking, with 8, collectively contributing less than 0.5 per cent of all planning approvals the quarter.

Mr Bridges said: “London needs to build an average of 57,000 new homes a year just to cope with expected population growth over the next decade.

“That means astronomical improvements in approvals and building starts need to be sustained, and even improved on for the next three quarters.”

Private investor service the Share Centre said the house building sector remains buoyant and recommends investors to hold.

In a note it said: “The consensus view is for a 14 per cent increase in full year sales, driven by increased numbers of homes sold and higher average prices.

“Investors will be keen to see the extent of the pickup in enquiries since the Conservative election victory and management guidance and expectations for the coming year, which should be positive.”

It came as housebuilder firm Persimmon’s announced positive first half figures, which were in line with expectations and reflected the buoyant market.

Helal Miah, investment research analyst at the Share Centre, said: “Persimmon is looking to open another 125 new development sites during the second half of 2015 and is actively looking to strengthen the land bank.

“We believe this strategy is in-line with the ongoing strong demand for housing as the economy and population grows. We recommend Persimmon as a ‘hold’ for medium risk investors seeking growth, but would not discourage investors buying on dips in the share price. However, our preferences in the sector are Taylor Wimpey and Berkeley Group.”