The Government has stated a commitment to address the growing housing supply crisis by permitting the construction of 200,000 housing units per annum in England. This compares to 163,000 completions in the year to April 2006 and an average of 144,000 over the last 10 years (NHBC figure, Nov 2006).

The New Planning Policy Statement 3 (PPS3) sets out policies to achieve this. However, Roger Pryor, of Strutt & Parker’s Residential Development Department suggests, “Clearly to achieve a short term increase of virtually 40% requires a significant step change in planning policy. The new PPS3 proposes important changes in emphasis but it will not provide the policy driver to achieve the Government objective. The result will be a continued demand/supply imbalance and the major reason why the housing market will remain robust and values will continue to inflate”.

PPS3 has reduced the emphasis on developing “brownfield” or Previously Developed Land (PDL) as well removing the restriction on developing greenfield sites as an alternative. However the objective of 60% PDL is maintained, which will limit options in some areas.

The new Policy also relaxes the requirement to continually increase site density at the expense of plot and unit sizes. Pryor says, “this reflects concern from the development industry that planning regulations were requiring an excess of 1 & 2 bedroom units at the expense of larger family units. The market is already reflecting this shortage as sites with more traditional mixed sized units are attracting premium values”.