The year 2022 served as a prime example of a black swan event for the housing market in the UK. A black swan event is an unpredictable occurrence that goes beyond what is typically expected and can have severe consequences.

While the impacts of Brexit, such as reduced commodity and labour supply chains, were visible, the unforeseen Russian invasion of Ukraine resulted in further constrained supply of goods and led to escalating prices for energy and petrol. These factors compounded issues affecting the delivery of housing projects, with the effects still felt in 2024.

With the election of a new Labour government in 2022, some of the housing-sector-specific issues need to be revisited. 

Current challenges

Several pressing challenges continue to affect housing in England. 

Substandard housing

The challenges facing the housing market have been well documented: Reports from 2013 by Shelter found that 3 in 10 people live in expensive, unsuitable, poor-quality homes. 

In 2019, the Guardian reported on a study by Heriot-Watt University in Edinburgh, which indicated that more than 8 million people live in unsuitable housing in England. One in eight people in England were affected by years of fast-rising prices and missed house-building targets. "3.6 million people live in overcrowded homes, 2.5 million cannot properly afford where they live, the same number live with parents or relatives against their wishes, and almost 1.4 million live in poor or substandard conditions".

As a result, the demand for suitable homes continues to outstrip the supply available, and therefore the building of new homes across the UK has never been more critical. 

Drop in housing delivery

In 2020 Covid-19 caused the number of new homes registered to be built by UK housebuilders to drop by 23%. Further delays result from insufficient staffing and resources. Shortages in materials, including copper, cement, and steel, have all played their part, while Brexit and Covid have impacted labour and time on site.

In the 2021 Autumn Budget, the then chancellor, Rishi Sunak, announced that up to 180,000 new and affordable homes would be built annually to close the existing gap in availability. This was a lower number than the aspirational 300,000 homes as a review of liveable and affordable housing revealed significant issues in housing that is fit for purpose. Similarly, the Meeting the Housing Demand report by the House of Lords, published in January 2022, called for urgent action from the Government and provided several recommendations. 

The new Government around Lizz Truss has distanced itself from housing targets and has scrapped the target of delivering an annual 300,000 homes by 2025 in favour of more local guidance. The new Labour government, has vowed to reintroduce compulsory housing targets, and indicted more flexibility about development in the greenbelt, especially near existing urban areas or previous developed land. We will see what difference this will make to housing delivery. 

Growth in planning backlogs

The above mentioned issues and the threat of recession continuing to dampen industry output are further exacerbated by the growth in planning backlogs. At the same time, the planning system continues to be affected by substantial capacity issues and inefficient processes.  For example, the Centre for Cities recently found that “the current system in England [...] is too uncertain and discretionary. This makes the housing crisis worse and the system unpredictable for everyone, including existing residents."

Opportunities for digital planning

As outlined above, many issues impacting house building are beyond an easy fix or even possible for the UK Government alone to remedy. However, digitisation of the planning processes could help increase the number of new homes being built across the UK quickly.

Planning & development in the UK is ripe for disruption. 21st-century problems cannot be solved with 20th-century solutions. Outmoded reliance on physical consultations and manual aggregation of site data has led to longer application processes, designs that don't utilise the best attributes of a site, and poor build methods that require post completion remediation (the least efficient time to remedy issues). 

The industry, Government, and regulatory bodies are fast coming to recognise that a "digital-first" approach can improve the inclusion and diversity of responses to consultations and streamline the application process by allowing information to be easily shared between project participants and regulatory forms. 

The Government has been pushing reforms for digital planning, most recently through two rounds of "PropTech" funding, which encouraged local governments to apply in conjunction with industry partners to develop new tools and services for digital planning. Since the 2019 Covid-19 pandemic, the take up of digital tools in Government, especially for engagement, has been accelerating. 

Delivering more of what's needed

New digital engagement tools make it much easier for housebuilders to increase inclusion and reach within the community, and for residents to access and visualise proposed development projects whilst on the go on a smartphone.

Professor Flora Samuel, Professor of Architecture in the Built Environment at Reading University, has recommended "A clear, holistic, map-based system that looks at community assets and needs", adding that "Technology will allow for the emergent field of adaptive planning using real time and constant data input to assist with the making of transparent, evidence-based and democratic decisions." 

If we look at community engagement, it makes sense to provide resources to potential participants through media channels with the widest reach. Second, it is essential to ensure all assets, text and imagery are digital in order to be compelling with a clear call to action for respondents. If we use interactive proposal maps, we can engage people from different ethnic and language backgrounds, and draw on visualisations and presentations of project constraints in ways that lead to more constructive participation.

Updating outmoded processes

While many larger building firms are using technology in a fully integrated way to streamline processes and drive up quality, the digitisation of processes is rarer in smaller firms. However, the uptake will have improved during work-from-home practices during the pandemic. 

When submitting planning applications, a digital-first approach will reduce uncertainty about the existing and future planning system. The slowness of reform has served to slow the supply of housing and created uncertainty for planners and housebuilders. A telling statistic is that only 40% of local plans were developed, reviewed or updated in the past five years, as local authorities wait for proposed reforms to be finalised. 

Further delays occur because many local planning authorities have highly complex plans that builders and the community find challenging to understand. Most plans are presently in PDF or text formats that cannot be readily used in planning software. This causes lengthy delays as applications are refused and have to be amended and resubmitted. Alongside introducing time limits on plan-making processes, there need to be standardised definitions and simplified guidance that provide consistency across the entire UK. Simplification will also aid community engagement with local plans.

The move to digital portal platforms will help ensure consistency across the country and simplify the process. Digital tools can also enable capacity when skills shortages constrain programs. This is evident in the delays for approvals, so more needs to be done to ensure as many operations as possible are automated. 

Providing data-driven appraisals based on access to planning data can also help planners get it right first time and allow community residents to understand the process and their rights under the planning systems. For instance, digitisation can help to increase transparency and engagement around existing infrastructure provision. 

While Section 106 Agreements and the Community Infrastructure Levy help deliver necessary infrastructure and social housing, the current system adds complexity and uncertainty, not to mention the lack of transparency around the decisions made under these agreements. 

Conclusions

House builders and housing associations have been under pressure to adapt to industry disruptions, supply chain impacts, cost increases, and new ways of working. Despite the current challenges, there remains a pressing need to provide more suitable homes to support more than 8 million residents in England currently living in unsuitable housing. 

In the face of an increasingly complex planning regime, the digitisation of planning processes helps house builders and governments to become more responsive to needs while tackling increasing requirements and ongoing capacity issues in local government planning departments. 

PlaceChangers creates best-in-class digital tools for built environment projects, providing design teams with real-world insight from community feedback and site-based analytics throughout all stages of the planning process. 

PlaceChangers community engagement platform is used across the UK by Developers and Local Authorities to gather more meaningful feedback than physical consultation processes. PlaceChangers Insights tool gives designers and planners instant access to site location information on demographics, green space and health and wellbeing. These insights enable cost-effective decisions in the design and planning phases of built environment projects.