One third of homes planned for London are never built, report warns

More than one in three new homes given planning permission in London are not being built, a report warned today.

The study by accountants Grant Thornton revealed that tens of thousands of houses and flats in the capital are being “lost” within the three-year period of receiving planning consent.

The research also highlighted that since 2014, just over 50,000 homes have been granted planning permission each year, putting Mayor of London Sadiq Khan’s goal of such a level of new housing “just in reach”.

It analysed planning consents from 2010 to 2013 and completions up to 2016. The report was published by the Fifty Thousand Homes campaign, launched by business group London First, and aims to identify logjams in house-building in the capital so they can be tackled.

Jasmine Whitbread, chief executive of London First, said: “A huge number of businesses are worried about their staff being priced out of the city.

“We have to act now to keep hold of the people who make London work.”

The study found that of 39,206 new housing units given planning permission in 2013, 25,251 were under construction within a three-year planning consent, giving an “attrition rate” of lost homes of 36 per cent.

The “attrition rate” was 27 per cent in 2010, 33 per cent in 2011 and 49 per cent in 2012, the year of the London Olympics when there was a spike in planning applications.

The failure to build these homes was highlighted as more and more Londoners are being priced out of owning or being able to rent in the capital.

Sacha Romanovitch, chief executive of Grant Thornton UK, said: “Solving London’s housing crisis could be key to unlocking future growth in the capital at a time when the economic outlook has weakened.”

The study also found that building often only starts around a year after planning consent, with completions taking on average another two years.

Developments of 100-149 homes were most likely to be built, with bigger schemes of 300 units or over more vulnerable to running into problems.

Around 30 per cent of new homes being built in London are on average “affordable” homes.

Ministers recently announced plans to tackle “landbanking” by making it easier for councils to issue completion notices and requiring developers to start building within two years, not three, after planning permission.

James Murray, London’s deputy mayor for housing, said: “Solving London’s housing crisis will be a marathon, not a sprint, and this underlines the huge scale of the challenge we face in delivering the new homes Londoners desperately need.”