By Emily Nicolle on Tuesday 6 March 2018
The peer-to-peer secured lending platform has a bone to pick with local councils.
The gap between Labour-led and Conservative-led councils’ approval rates for residential planning applications is now almost twice as wide as it was before the 2010 election, reaching 11 per cent in 2017 compared to 6 per cent in 2009.
According to data from the Department of Housing, Communities and Local Government, Conservative-led local authorities granted 77 per cent of all residential planning applications in 2017, compared to 88 per cent approved by Labour-led councils. This is compared to prior to the 2010 election, where successful application rates hit 63 per cent in Conservative areas and 69 per cent in Labour ones.
Though this could be the result of Conservative-run councils often being located in greenfield locations which are less likely receive planning approval, Liam Brooke, co-founder of peer-to-peer secured lender Lendy, says that this gap could nevertheless be stunting positive effects on housing that has been achieved by alternative finance providers in recent years.
“Alternative finance is beginning to help fill the funding gap that has opened in the property development market, but if local authorities don’t get behind developers, there will never be enough spades in the ground to make a dent in the UK’s housing shortfall,” commented Brooke.
“Despite pressure from central government, many local authorities are still making it hard for new homes to get built. Some progress has been made in the last decade, but there are too many roadblocks for developers, not least councils that refuse planning permission because they fear nimbyism.”
Out of the 20 local authorities with the highest refusal rates, 16 of those were Conservative-led. Tandridge in Surrey granted just 44 per cent of the planning applications it received between 2016 and 2017, with East Dorset (45 per cent) and Bournemouth (49 per cent) falling just behind.
Of the 17 authorities that granted 100 per cent of the applications they received, 12 of those were Labour-led, including Lincoln, Greenwich and Rotherham.
Lendy believes the funding provided to developers by the alternative finance sector is “critical” to tackling the UK’s housing shortfall, citing successful builds being completed at their lowest rate since the 1940s. Indeed, peer-to-peer property loans offer investors some of the highest returns on the market, usually falling between 7 and 12 per cent.