tdm newsletter: october

the decline of planning approvals: a growing crisis

Between April and June 2024, planning authorities in England received 84,400 applications, a 9% drop from the previous year. Only 70,200 of these were approved, down 7% from 2023. Fewer projects are even reaching the planning stage, and fewer are being approved – despite a housing shortage that’s impossible to ignore.

Though 86% of applications were approved, the sharp decline in submissions speaks volumes. Developers are quickly losing interest in jumping through the hoops, which is hardly surprising, given the infamously slow and restrictive UK planning system.

“One of the biggest hurdles developers face is the sheer time it takes to get applications through the system. Local authorities are understaffed, which drags out the process, and even when applications do make it through, they’re often bogged down by appeals and consultations – despite the clear need for more quality housing across the UK.” – Chris Lucas, Consultant, tdm recruitment

The drop in approvals is worsening the housing crisis, pushing up prices and putting homeownership out of reach for many. Meeting the demand will require larger developments, yet projects of 100-500 units take 2.5 years on average to clear local authority review, and larger ones take 5 years. Even single new homes can be tied up in planning for 7-9 months. Delays like these have direct economic costs, especially for a country where construction is closely tied to growth.

Large-scale housing schemes, by which we mean those with ten or more units, are essential to meeting housing needs. Yet these developments dropped by 12% in the second quarter of 2024, reaching just 56,488 units. Smaller projects like self-builds and non-residential conversions account for the rest but aren’t enough to bridge the gap left by reduced large-scale development.

In London alone, planning approvals have seen a sharp decline, with a significant 20% drop in applications. This is particularly alarming given the city’s ever-pressing demand for housing. It’s almost as if there’s a conspiracy to keep potential residents at bay. Notably, 80% of London boroughs have the highest refusal rates in the country, with at least half of all submissions being rejected. Not to mention that over the past 13 years, London has cycled through 16 different housing ministers, creating a turbulent landscape where political manoeuvring often overshadows actual housing needs.

Sir Keir Starmer has pledged to confront nimby activists who are obstructing new housing developments and proposed planning passports aimed at streamlining the approval process for projects. The housing crisis may well hinge on the effectiveness of such proposals in breaking down the resistance to new projects and ensuring that homes can be built where they are needed most.

what happened in the 2024 autumn budget?

Chancellor Rachel Reeves has presented this year’s Autumn Budget, unveiling a range of changes to employers’ national insurance contributions, inheritance tax, capital gains tax, and other reforms. Leading with plans to raise taxes by ￡40 billion to fill a ￡22 billion “black hole” in public finances and boost economic growth, most of what was announced was teased months prior. Certainly, the rhetoric the Chancellor framed around the budget yesterday, was one in which without such cutting measures Britain could not rebuild. An attitude that has formed divisive opinions across the nation.

On the housing front, she’s pledged over ￡5 billion to support housebuilders, enhance the affordable homes programme, and invest in site development across the UK.

In a notable change to stamp duty, the surcharge on second homes and buy-to-let properties has jumped from 3% to 5%, which started yesterday. However, the lack of a freeze on overall stamp duty thresholds means homebuyers should prepare for those thresholds to rise as expected at the end of March 2025.

Capital gains tax will be increased. The lower rate will increase from 10% to 18%, while the higher rate will rise from 20% to 24%. However, there will be no changes on the 24% capital gains rate imposed on second properties. The government has also extended the freeze on inheritance tax threshold, allowing ￡325,000 to be passed on tax-free. Additionally, there will be a ￡2 billion tax boost from reformed reliefs for business and agricultural assets, with a 20% inheritance tax applied to those over ￡1 million.

Ms. Reeves also reaffirmed Labour’s commitment to building 1.5 million homes during this parliament, with ￡5 billion allocated for housing next year. This includes a ￡500 million boost for the affordable homes programme to create 5,000 additional homes and ￡3 billion to support small and medium enterprises and the build to rent sector through housing guarantee schemes. Right to buy discounts will be reduced, and local authorities will keep all receipts from sales to help preserve existing council housing stock.

We’re encouraged by the government’s announcement of additional funding for SMEs and its commitment to planning reforms, which could help reverse the decline in house building we’ve seen in recent years. However, the lack of support for homeownership, particularly for younger households struggling to enter the housing market, is worrying to say the least. While investments in planning and affordable housing are promising steps forward, they may fall short when it comes to tackling the housing crisis. As always, we’ll be here to keep on eye on how these developments unfold and what they might mean moving forward.

On October 10th, Labour introduced its employment rights bill to parliament, and it’s been quite the talking point. Described by the government as the “biggest upgrade to rights at work for a generation,” this bill aims to overhaul workers’ rights in the UK. Whether you’re an employee or business owner, you might be wondering how this bill will affect you and when these changes will kick in.

Key reforms in the employment rights bill:

1.?????? Guaranteed hours for zero-hours workers: Workers on zero-hours contracts will now have the choice to secure guaranteed hours, while also retaining the flexibility to stick with their current contract terms if they prefer.

2.?????? Statutory sick pay from day one: Employees will be eligible for statutory sick pay starting from their first day of illness, removing the previous earnings threshold of ￡123 per week to qualify.

3.?????? Creation of a fair work agency: A new fair work agency will be established to enforce workers’ rights and oversee compliance, ensuring protections are upheld across workplaces.

4.?????? Enhanced protections against workplace harassment: This bill introduces stronger protections against workplace harassment, including specific safeguards against sexual harassment, aimed at creating a safer work environment.

5.?????? Repeal of the 2016 trade union act: The repeal will lift restrictions by the 2016 act, restoring rights for trade unions to strike and advocate for their members effectively.

With 8% of all businesses and 20% of businesses with 10 or more employees reporting worker shortages, these reforms are designed to tackle pressing labour market issues. The government is optimistic that these changes will breathe new life into the workforce, which is crucial for economic growth.

In addition to these confirmed reforms, there are several aspects of the employment rights bill still under discussion that aim to provide employees with more “day one” rights. Key among these are provisions for unpaid parental leave and bereavement leave, which if enacted would grant employees immediate access to these extra supports upon starting a new job.

While it’s encouraging to see employees gaining more “day one” rights, we must also consider the potential impact on employers. These reforms will require employers to be more vigilant in their hiring processes to ensure they select the right candidates who align with their needs and values. Striking a balance between providing these rights and managing operational costs, which have risen from the autumn budget, will be crucial to maintaining a sustainable workforce. However, the bill includes various reforms and it will take time for these changes to affect employees’ lives. Most provisions are not expected to become law until 2026 ensuring companies have time to make necessary adaptions, although for the most part you’ll find many already have such policies in place.?