Former cabinet minister Sir Oliver Letwin has submitted his independent review of land banking and found “no evidence” of the practice.
Reflecting on Sir Oliver’s review in the Budget, Chancellor of the Exchequer Philip Hammond said, “The review found no evidence that speculative land banking is part of the business model for major house builders.”
Analysis undertaken by shadow housing secretary John Healey revealed a stark contrast between the total of 313,700 new homes granted planning permission and the number of homes built, which reached just 183,570. The shortfall of over 130,000 new homes is the greatest since 2006, when records started.
The figures highlighted how around 130,000 homes are not being built as a result of developers across England continuing to sit on the land where planning permissions to build new homes has been granted.
The Letwin review has found that the average time taken to build out large sites, at 15.5 years, is too long. He was also critical of too many new properties looking the same and thus taking too long to sell.
Demands had been voiced for the introduction of new legislation and harsher penalties against developers land hogging.
The housing charity Shelter had hoped that Letwin’s review would recommend strong legislative changes to the Land Compensation Act to bring down the cost of land.
Only 50% of new homes being built in both London and the North-West had obtained planning permission between 2012 and 2017.
Since 2012, the percentage of homes constructed versus permission granted has been running at around a fairly consistent 58%.
John Healey, Labour’s Shadow housing secretary who undertook the analysis, said: “The government needs radical new powers to end land banking. They should offer ‘housing delivery contracts’, where developers sign up to targets for the rate of housebuilding on a site, with fines if these targets are missed.”
“Ministers must take decisive action, not more warm words.”
Healey said: “Councils need greater powers than only being able to grant or refuse planning permission. Providing councils with the authority to introduce stricter new rules would allow new homes to be built quickly.”
Housing minister Kit Malthouse said: “There is no mission more urgent than making our housing market work, and we are committed to building 300,000 homes a year by the mid 2020’s.
“Building more of the homes people want on large sites more quickly is an important part of this. We asked Sir Oliver Letwin to carry out an independent review into the build out rate so we can get more properties built more quickly. This is all part of our drive to build more, better, faster.”