The study shows Government action to stimulate housing has failed to reduce the bumper backlog of preciously needed homes over the past year.
According to the reserach commissioned by the Local Government Association and carried out by Glenigan, developers are also now putting in fewer planning applications and taking longer to complete work on site.
Councils are concerned that the fall in planning applications they are receiving may threaten the prospect of a long-term housebuilding recovery.
The LGA said the troubling figures showed the need for government to lift restrictions on council investment in housing, and concentrate efforts to rejuvenate house building on funding the construction of new homes, rather than further meddling with the planning system.
Report findings
The backlog in homes with planning permission yet to be built was reduced by just 6,000 in the past year.
It now takes 27 months, on average, from sites receiving planning permission to building work being completed – seven months longer than in 2007/8.
Councils continue to approve almost nine in every 10 planning applications they receive.
The number of planning applications fell 5% last year, separate government figures show.
Local authorities are calling for significant investment to tackle the new homes backlog and get more homes built.
Thousands of shovel-ready sites could be kick-started into action if a Treasury imposed cap on the amount councils can invest in new housing was lifted.
Recent research showed that councils could build up to 60,000 additional new homes over the next five years if they were allowed to invest in housing against normal borrowing guidelines. This would create jobs, boost Gross Domestic Product by 0.6 per cent and reduce the housing benefit bill.
Councilllor Mike Jones, Chairman of the LGA’s Environment and Housing Board, said: “The bumper backlog of unbuilt homes and drop in the number of planning applications submitted to councils last year is a worrying sign that the housing market is not yet on the road to long-term recovery.
“While there has been progress made, this risks being undermined if we do not find a way to ensure developers keep up with demand.
“These figures conclusively show that it is not the planning system holding back the building of much-needed new homes.
“Councils are approving nine in every 10 planning applications we receive and we know that there has been an increase in the numbers of first-time buyers getting mortgages.
“The challenge now lies in actually getting houses built. Government schemes to help buyers access finance risk creating a bubble if there isn’t an increase house building to match it
“Government has an unrivalled opportunity to create jobs, provide tens of thousands of homes and help the economy without having to find a single extra penny. New homes are badly-needed and councils want to get on with building them. The common sense answer is for the Treasury to remove its house building block and let us get on with it.”
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