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'Land banking' is far less of a problem than the challenges of the planning process

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As Sir Oliver Letwin undertakes his review into the barriers to housebuilding there has inevitably been a huge amount of noise around planning issues as various parties try to influence his thinking.

The Local Government Association put out its annual press release claiming builders are “sat on” more than 400,000 plots to try to generate the inaccurate ‘house builders are landbanking’ headlines I presume it believes will divert attention away from local authority failings. 

We responded robustly to this. As we pointed out, most of the plots are on sites already under construction or are not actually implementable – the LGA measures a permission at the point the first condition is discharged when as we know most will come with numerous conditions that it will take developers months or years to discharge via understaffed planning departments. 

In the current market, builders, having gone to the time and expense of processing an application to the point where it is actually implementable, will not “sit on” a site.

And even if there were 400,000 plots out there, considering local authorities are supposed to have identified five-year land supplies and we are aiming to build 300,000 home a year, it is nowhere near enough.

I suggest the LGA would be better served sitting down with members and builders to look at why it takes so long to process applications to the point where work can start; why so many local authorities still don’t have adopted plans in place; and how we identify enough sites of various types and sizes to meet housing need.

This, of course, will include brownfield sites – which currently make up the majority of housing developments.  

There are challenges to using brownfield sites. Previously developed land often has additional costs not associated with greenfield developments such as demolition and decontamination. Although some services such as utilities connections can be reused they are often old and need replacing. Replacement is often more costly than providing a new system as optimisation of layouts can be compromised. Neighbouring buildings can present design and layout challenges and existing neighbours require greater constraints on working hours, traffic movements and other construction operations.

The new requirement for local authorities to identify brownfield land suitable for residential development through brownfield registers has been implemented but the more positive move, of producing a part two register and granting permission in principle status to those sites, has been taken by only a handful of authorities on a tiny number of sites. 

This surely shows some reluctance on the part of local planning authorities to wholeheartedly embrace the prospect of a brownfield redevelopment strategy for their area.

Of course, every site is unique and creates its own particular challenges. Thus both brownfield and greenfield sites require bespoke solutions meaning neither is, inherently, “cheaper” or “easier” to develop than the other. Indeed, brownfield sites usually have a number of acceptable alternative uses, meaning the land value is high, -giving little headroom for contingency costs of unknown issues.  

As we move forward, while the majority of development will continue to be on brownfield sites there has to be an acceptance that if we are to address our chronic housing shortage, not all development can be on brownfield land. Local authorities need to take the admittedly often difficult decisions about what land is most appropriate to address their housing need. 

Most local planning authorities treat all land the same. This means that frequently contributions towards community benefits such as affordable housing are the same, meaning many brownfield sites are unviable to redevelop for housing. This is especially the case where alternative uses are acceptable, as such contributions are rarely sought from these other land uses. If reuse of brownfield land is to be encouraged there should be incentives for applicants such as lower planning obligation contributions or speedier processing of applications.

We are confident that as Sir Oliver assesses all the complex issues involved, he will ignore the noise and reach some sensible conclusions based on actual facts.

Andrew Whitaker, planning director, Home Builders Federation

 

 

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Readers' comments (4)

  • Hopefully Sir Oliver will also look at whether it is a necessary requirement for homebuilders to make 25% profit on each house. And how this might contribute to the industry being an oligopolistic cartel, as the recent House of Lords report implies.

    https://publications.parliament.uk/pa/ld201617/ldselect/ldeconaf/20/2012.htm

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  • As ever with the big developers, Mr Whitaker cherry picks his arguments. The five-year land supply requirement on authorities refers to available land, not permissions - the LGA 400k figure relates to permissions given not being built out, not land available, so it is inaccurate to conflate the two.

    We also know very well what developers mean when they speak about sites "under construction" - ie sites where the minimum works have been done, such as laying foundations on a small number of plots to count as under construction, but the site is then mothballed until the next financial year when house prices will have gone up and the numbers are needed to meet the executives' bonus criteria in their targets (but not one home more than the target - that can wait to go towards meeting next year's target).

    Regardless of what Mr Letwin comes up with, it was good to see the Prime Minister recognise in her recent speech the profiteering of the big developers, and the intention to get rid of viability assessments which have decimated the building of social housing over the last seven years, and as such contributed to the terrible increase in homelessness as councils have fewer home to allocate homeless households to.

    What a sad indictment of current policy - house builders' excess profits and immoral executive bonuses paid for on the backs of families becoming homeless and run away council budget overspends. Shame on you.

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  • 'Noise' = Persimmon boss £120m bonus.
    'Sensible conclusions' = continued profiteering.

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  • One of the biggest drains on both private and public sector developments is the price of land. We need to allow public bodies to compulsorily purchase land at pre-planning permission prices rather than the artificially inflated prices achieved after the state grants planning permission.

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