Is it quicker to build homes on large sites, or small?

Too slow, guys. Image: Getty.

The associate director of planning consultancy Nathaniel Lichfield & Partners explains why large new housing sites aren’t a silver bullet.

Most people now agree that we need to build significantly more homes than we currently do – and the government wants planning to think big in how it goes about achieving this objective.

With its “locally-led” garden towns and villages agenda, and last December’s consultation on proposed changes to the National Planning Policy Framework to encourage new settlements, local planning authorities and developers are being encouraged to look closely at bringing forward large-scale housing development projects.

On paper, this emphasis on large sites is useful: with just one site of several thousands of homes, a district can meet a significant proportion of its housing requirement. Moreover, their sheer size can stimulate the local economy and drive innovation as the site and infrastructure are developed.

However, large sites are not a silver bullet. Their scale and complexity mean that they take time to plan and require significant upfront capital investment. Furthermore, there is a need to be realistic about how quickly they can deliver new homes – such sites are not immune to the challenges and risks of the market.

Our latest research report, Start to Finish, analyses the lead-in times, planning period and delivery phases of housing sites. Here are our key findings.


Planning period

Before any homes can be built on-site, an outline or full planning application needs to be submitted and planning permission (followed by reserved matters approval for outline applications) has to be granted. A Section 106 obligation will generally need to be entered into. Pre-commencement conditions need to be discharged before any development start on-site. 

Our research shows that both the planning period (from application to decision), and the period of time between permission being granted and the first home being built, depends on the complexity of the site, which frequently correlates with its size.

And the larger the site, the longer the planning application determination period. Sites outside of London of between 100 and 499 units take, on average, 2.5 years – at least half the time required for sites of over 1,000 units – reflecting differing levels of site complexity.

By contrast, smaller sites take longer to deliver the first home after planning approval. This period of development takes just over 18 months for sites – outside of London – of under 500 units; but, perhaps surprisingly, this is significantly quicker on larger sites – in particular, on the largest 2,000+ dwelling sites, the time period from planning to first completion was under a year. This could be because larger sites may more often have larger housebuilders on board by the time an implementable permission is secured, thus be able to mobilise resources quicker.

Planning period by site size. Source: NLP analysis.

Housing delivery rates

It is widely recognised that build rates on sites are dictated by the number of sales outlets and market absorption rates. Self-evidently, large sites will frequently have more than one housebuilder building and selling homes. The larger the site, the greater the number of different housebuilders on-site and the faster the delivery rate. 

Based on our research, we found that, on average, sites of 100 to 1,000 units will typically deliver 60 units each year, while sites of 2,000 or more will deliver over 160 units per annum.

However, it is worth noting that while larger sites have a higher delivery rate due to the number of additional outlets, they take longer to plan and start on-site. There is also significant variation from the average: some sites can be quicker, others slower. And there are fluctuations from year to year.

Housing delivery by site size. Source: NLP analysis.

Our analysis shows that markets really do matter for housing delivery rates. Using estimates of land value with residential planning permissions at local authority level – as a proxy for market demand and economic strength – relatively stronger markets tend to have higher delivery rates.

This raises an important point about absorption rates: in stronger areas, housebuilders are able to build homes at a faster rate and sell them at the value they expect.

Housing delivery rates and market strength. Source: NLP analysis.

Where viable, housing sites with a larger proportion of affordable homes deliver more quickly. For both large and small-scale sites, developments with 40 per cent or more affordable housing have a build rate that is around 50 per cent higher, compared to developments with less than 10 per cent affordable housing.

The relationship between affordable housing provision and delivery rate is complex and rests on a variety of factors including viability and the level of grant or subsidy available to housing associations. On large sites, securing affordable housing “sales” can benefit housebuilder cash flow by providing financial certainty, which can be beneficial, particularly early on in a larger scale development.

However, it does demonstrate that – where viable – a tenure mix that extends beyond just housing for sale can help overcome the natural limitations associated with absorption rates. So the introduction of self-build and private rented properties might similarly increase rates of development.

Affordable housing provision and housing delivery. Source: NLP analysis.

If we are serious about achieving the Government’s target of one million homes built by 2020 – or indeed, deliver the 300,0000 per year that are needed – we need to recognise that it is about much more than just having a headline number of units in plan allocations or with planning permission. We need to understand trajectories of development: the length of time it takes for sites to come forward and the rate at which they deliver homes.

Every site is different, and there is a need for local authorities to understand the barriers and drivers of delivery in their area, seek to allocate appropriate housing sites in response and then closely monitor their progress.

Joe Sarling is associate director of planning consultancy Nathaniel Lichfield & Partners. This article was originally posted on the firm’s blog

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What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.


Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.