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Labour moots land-banking tax

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The Labour Party has promised to crack down on developers sitting on undeveloped land held in a bid to build an extra 300,000 homes being built in the capital

The plans, revealed at the party’s conference today (24 September), would see ‘land bankers’ hit by new ‘use it or lose it’ laws. The new laws would give local councils the powers to fine developers or impose compulsory purchase orders on the land.

Labour leader Ed Miliband announced that a review into housing reform legislation will be led by government finance expert Michael Lyons.

The Lyons-led housing commission will explore how compulsory purchase orders could be used by local authorities to buy and grant planning permission on land which is being sat on by developers, holding back development.

Miliband also committed the the party to a ‘new generation’ of garden cities as part of the solution to the nation’s housing crisis - a move welcomed by TCPA Chief Executive Kate Henderson who said the news was ‘long overdue’.

Speaking at a fringe event organised by London Councils, which represents the capital’s 33 local authorities, Mayor Steve Bullock called on the government to introduce an ‘undeveloped land tax’ to discourage land-banking.

He said: ‘It’s frankly unacceptable that developers are hoarding land which could be used to build much needed homes for Londoners. With London’s population set to top nine million by 2021, we need to think radically about policy options to boost supply. Cracking down on landbanking could add 30,000 homes to London’s housing stock’.


Steve Turner from the Home Builders Federation: ‘Evidence proves developers do not unnecessarily land bank. The OFT and Kate Barker both concluded the industry did not have overly large land banks. The complex, bureaucratic nature of the planning system necessitates developers to have a supply of oven ready land to plan their businesses.

‘A recent LGA report estimated there were only around 200,000 plots on sites not started. This is only a year’s supply at target build rates – well under the 3 or 4 years it is recommended the industry needs. If we are to see a much needed increase in housing supply, we will need the planning system and Local Authorities to deliver the land needed for development – or we will not get near the 200,000 homes Labour is promising.’

Previous story (21.06.13)

Miliband: Labour will punish developers who sit on land

Developers could face fines or compulsory purchase orders on undeveloped land as part of new ‘use it or lose it’ powers.

In an attempt to get more homes built, Labour is considering giving local councils power to punish developers which sit on land.

In a speech to Labour’s National Policy Forum, Labour leader Ed Miliband is expected to criticise developers for sitting on land with planning permission and that the current housing crisis is being exacerbated by developers hoarding land.

Miliband is also expected to say that should Labour regain power, developers will face fines or compulsory purchase orders on undeveloped land as part of new ‘use it or lose it’ powers.

In the UK, planning permission has been granted for 400,000 new homes which are yet to be built and in London 45 per cent of undeveloped land is held by companies that do not carry out construction work.

The Labour leader will argue that the new housing policy would instantly result in more homes being built.

Miliband will claim the lack of house building cannot be blamed on local councils, saying the latest statistics show 82 per cent of planning applications for major residential applications over 10 units were approved by local authorities.

Planning minister Nick Boles criticised Labour’s ‘incoherent policy’: ‘Labour clearly learnt nothing from its failures in Government as 400,000 homes represents less than two years’ worth of the number of new homes that we need to build. And confiscating any land from development will not help build a single house.

‘We’re already incentivising developers to build 170,000 affordable new homes for hardworking people by getting mortgage lending flowing again; using our Getting Britain Building scheme; unlocking development on stalled sites and renegotiating planning permission for sites that weren’t previously commercially viable to build on - which Labour opposed.’

Peter Stacey, director and head of the residential development sector at Turley Associates, was also sceptical of the proposals. He said: ‘Housebuilders buy land to build homes – they are not land companies.  We act for housebuilders across the country and have yet to see any evidence of land banking.  It is, quite simply, a myth and to tax a myth is bad policy.’

He added: ‘The market is not being artificially constrained by housebuilders. Political inertia at a local level continues to stifle the availability and range of sites needed to meet market demand.  Good sites are developed quickly, poor sites more slowly.’


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