Labour has revealed plans to crack down on developers who do not build homes quick enough on land with planning permission, a practice often called ‘land banking’.

Deputy Prime Minister Angela Rayner has said that under new government proposals, housebuilders will have to commit to delivery timeframes before they get planning permission and submit annual reports showing their progress to councils to ‘keep them on track’.

Failure to build

Developers that consistently fail to build out consented sites and those who secure planning permissions simply to trade land speculatively could also face a ‘Delayed Homes Penalty’ worth thousands per unbuilt home, paid directly to local planning authorities.

But the most draconian measure within the proposals is to allow councils to acquire ‘land banked sites’ where there is a case in the public interest and the land stripped of future planning permissions.

Also, the Government is looking at forcing sites to have mixed-use tenures of both property sales and renting, and therefore ensure a higher proportion of homes are ‘affordable’.

Radical steps

“This government has taken radical steps to overhaul the planning system to get Britain building again after years of inaction,” says Rayner.

“In the name of delivering security for working people, we are backing the builders not the blockers. Now it’s time for developers to roll up their sleeves and play their part.

We are backing the builders not the blockers. Now it’s time for developers to roll up their sleeves and play their part.”

“We’re going even further to get the homes we need. No more sites with planning permission gathering dust for decades while a generation struggle to get on the housing ladder. Through our Plan for Change, we will deliver 1.5 million homes, fix the housing crisis and make the dream of home ownership a reality for working people.”

The Local Government Association, which has been pushing for the changes, has welcomed the announcement, saying: “Too often they are frustrated when developers do not build the homes they have approved.

Builders’ response

Richard Beresford, Chief Executive of the ion of National Federation of Builders (NFB), said: “Housebuilders build homes. They do not sit on land they can delivery.

“Landowners, land promoters and developer investors might sell permissions, but this is because they are not the ones building the site out and making the finances work. It wouldSeven years after the Tories own investigation found no evidence that builders ‘land bank’ sites, Labouir has moved to clamp down on the practice. help if the Government provided data qualifying their concerns.

For developers to offer delivery timelines would require a rules-based planning system based on certainty, which is the opposite of the UK system.

“It also needs major utility, environmental and legal agreement reforms, to name a few barriers. If there are not a considerably high number of penalty exemptions, fewer homes will be built because builders will avoid the risk that planning politics over-rules reality. The biggest winners here are likely to be the lawyers.”

Labour’s announcement flies in the face of the previous government’s investigation into land banking in 2018, led by then Tory MP Oliver Letwin, and the then Chancellor Phillip Hammond said after its publication that “the review found no evidence that speculative land-banking is part of the business model for major house builders, nor that this is a driver of slow build out rates”.