Delivering construction projects is taking longer. Glenigan’s analysis of project data reveals that over the past five years the time taken to bring projects through planning to tender and construction has grown sharply. The pandemic, supply chain disruptions, and spiralling energy and material costs all appear to have contributed to the rise in development times. While these restraints on development activity appear set to ease over the next two years, the industry will face regulatory changes that may also slow the delivery of planned projects.
“The longer approval time for private residential projects supports housebuilders’ concerns that the planning system is a hurdle to increasing new housing provision”
All stages of the development process are taking longer than during 2019, with preconstruction lead times seeing the greatest change.
The median time taken for a new build project, started during 2022, to progress from a detailed planning application to work starting on site was 73 weeks. This is 26 weeks or 29 per cent longer than a project started on site in 2019. The time typically spent on site has also grown by 8 per cent, from 60 to 65 weeks, over the same period.
Until last year, the time taken to secure planning approval had been stable, typically taking 22 weeks for new build projects. However, decision times have recently become more protracted, rising to 27 weeks last year and 29 weeks during the first half of 2023. The slower decision time may reflect growing pressure upon the limited resources in local planning departments.
Strikingly, the median time taken to secure approval for new private residential projects is far greater than for other types of development and has also grown sharply from a median of 35 weeks in 2019 to 45 weeks last year (with half of new residential projects taking even longer).
The longer approval time for private residential projects supports housebuilders’ concerns that the planning system is a hurdle to increasing new housing provision.
The time taken for a project to progress from planning consent onto site has seen the sharpest increase, with lead times particularly stretched in 2022. New build projects typically took 39 weeks to reach site last year – a 39 per cent rise on the 28 weeks taken in 2019. The rise reflects the disruption of industry supply chains and spiralling construction costs over the past two years, which have prompted some clients and contractors to re-evaluate and redesign projects prior to construction.
These supply-side disruptions are now easing. Although prices are still high, construction-material inflation has slowed sharply, providing clients and contractors with more certainty when costing projects. This should help reduce the time taken for projects to progress to site.
However, these gains may be offset for some projects as the Building Safety Act comes into effect. The plans and construction programmes for ‘high risk’ buildings will need to be registered and approved by the industry regulator before work can start on site, potentially lengthening the time taken to get a project onto site. The construction phase may also be disrupted, especially if variations to the project need to be reviewed and approved by the regulator.