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Government targets slow-to-build developers in planning shake-up

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Prime minister Theresa May is set to repeat the government’s intention to tackle land-banking by developers, in an attempt to speed up housebuilding

According to press briefings in advance of today’s launch of the revised National Planning Policy Framework (NPPF), May will say the government is considering measures to allow councils to take developer’s track record on building out past planning permissions when considering new applications.

Her comments come despite the fact that a government-commissioned review of build-out rates, announced in the Autumn Budget, has yet to produce its interim report, let alone final recommendations.

May is set to say: ‘I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.’

She will also claim that slow housebuilding is partly down to pay structures at some of the UK’s leading developers.

‘The bonuses paid to the heads of some of our biggest developers are based not on the number of homes they build but on their profits or share price,’ she will say.

‘In a market where lower supply equals higher prices, that creates a perverse incentive, one that does not encourage them to build the homes we need.’

However, there was no action announced in the government’s pre-speech briefing aimed at tacking this issue.

Instead, according to the briefing, May will merely exhort developers to ‘do their duty to Britain and build the homes our country needs’.

Responding to the comments, Andrew Whitaker, planning director at the Home Builders Federation, said: ‘As has been proved many times by independent investigations, housebuilders do not land bank.

‘Having gone to the expense and time of getting a permission, builders cannot afford to sit on it.

‘Like builders, local authorities have responsibilities too, and we support moves to force them to put in place a robust local plan and five-year housing supply.

‘Doing so provides all parties with certainty and enables them to work together to build the right homes in the right places.’

In an interview with The Sunday Times, published yesterday, communities secretary Sajid Javid promised the government will push ahead with a new Housing Delivery Test outlined in the Housing White Paper.

Originally the government had said that the test – which would require councils whose delivery falls below 95 per cent of their housing requirement to publish an action plan – would be introduced in November 2017.

The revised NPPF is also expected to contain rules determining how many homes councils should be building each year, taking account of local house prices, wages and the number of key workers.

This move is effectively an admission of the failure of housing policies introduced by former communities secretary Eric Pickles.

In 2010, one of his first acts in the role was to legislate to scrap regional housing targets, which he described as ‘Soviet tractor-style top-down planning targets’.

He said that the government would, instead, focus on introducing ‘powerful new incentives for local people so they support the construction of new homes in the right places and receive direct rewards from the proceeds of growth to improve their local area’.

Responding to the pre-speech briefing, Lord Porter, chairman of the Local Government Association, said that it was ‘completely wrong’ to blame councils for the slow increase in housebuilding rates.

He said: ‘In the last year, councils and their communities granted nearly twice as many planning permissions as the number of new homes that were completed.

‘The truth is that councils are currently approving nine in 10 planning applications, which shows that the planning system is working well and is not a barrier to building.’

Today’s NPPF revisions are expected to implement around 80 policy proposals outlined in last year’s Housing White Paper, according to the Number 10 press office.

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Readers' comments (3)

  • Both main political parties froze out local authorities from being an active part of the housing delivery world for decades. Now councils are being blamed for not 'delivering' when they are in no position to do so. The headless chicken brigade continues to blame the planning system, alleged land banking, and occasionally building regulations, for what is in fact a failure of the political class. Private house-builders, perfectly reasonably, build for their market. They are not responsible for the (non-existent) social housing programme. When will politicians start taking responsibility for the homes shortage, instead of inanely criticising companies that actually build them?

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  • ‘I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.’ Perhaps someone should tell May that planning permission belongs to the land upon which it is granted, not to the people who apply for it. Anybody can apply for planning permission on anybody else’s land.

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