Read more articles in: Blog, Mander Hadley, News, Property, Property

Land hoarding by housing developers refuted in report

A new report has refuted claims that housing developers are hoarding land after getting planning consent.

There have been accusations that builders are hoarding “land banks” until they can make bigger profits, with councils demanding powers to force them to build on the sites, or sell up using compulsory purchase orders.

The report outlines what it describes as flaws in the frequently referenced reports put out by the Local Government Association (LGA) every year.

The comprehensive survey, taken in selected parts of the UK by planning consultancy Lichfields, probed planning permissions granted by local planning authorities (LPAs) over a five-year period.

The two-part survey, Tracking Progress, was commissioned by the Land Promoters and Developers Federation (LPDF) and the Home Builders Federation (HBF) to compare what building might be needed to meet the Government’s desire for 300,000 net additional homes to be built every year across England.

The areas chosen for the survey were Central Bedfordshire, the London Borough of Wandsworth, Cheshire East, Colchester, and Stratford-on-Avon LPAs because of their geographical spread and mix of types of authority area.

No evidence of systemic failure

The report states: “None of our analysis suggests (at least outside of London) any systemic failure in converting planning permissions to development by the industry.”

In Taking Stock, the first phase of the research, Lichfields found ‘logical fallacies’ with the LGA report, most notably because it double counts schemes that are subject to multiple planning permissions, as builders re-submit applications for final approval as details are agreed with the local authority.

Paul Brocklehurst, chairman of the LPDF, said about the latest findings: “This research highlights the gross over simplification in the analysis by the Local Government Association frequently quoted in the national press and by many politicians regarding the ‘stock’ of unimplemented consents.”

Andrew Whitaker, planning director at the HBF said: “This myth that house builders land bank has been dismissed by a growing number of independent reviews. As this latest research demonstrates, aggregating numbers of outstanding planning permissions misses the ‘story’ behind each and every site that comes forward for development.”

The report adds: “When local residents and councillors refer to permissions that have not yet been delivered, they are, in many cases, simply observing a lag period for delivery on outline schemes that is entirely to be expected.”

The report concluded that when looking at the number of units granted any type of permission (both full and outline) in a given year, after five years one might expect roughly:

Three per cent to five per cent of homes granted permission will lapse or stall.
Ten per cent to 15 per cent of homes granted permission will be superseded at a later date by a fresh permission (and not necessarily harming the pace of delivery).
Thirty five per cent to 50 per cent of homes granted permission will have been delivered.
Thirty five per cent to 50 per cent of homes granted permission will remain extant but on sites delivering on a phased basis beyond five years.

For help and advice with commercial property matters, please get in touch with our expert team today.