{"id":6035919,"date":"2021-09-23T09:24:44","date_gmt":"2021-09-23T08:24:44","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=6035919"},"modified":"2021-09-23T09:24:44","modified_gmt":"2021-09-23T08:24:44","slug":"is-housing-crisis-really-caused-by-developers-land-banking","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-us\/news\/is-housing-crisis-really-caused-by-developers-land-banking\/","title":{"rendered":"Is housing crisis really caused by developers “land banking”?"},"content":{"rendered":"

The blame game of the UK’s housing crisis is ongoing, with little agreement on what is causing the shortage. Many point the finger at developers land banking, but a new study identifies a different culprit.<\/strong><\/p>\n

The government has been making moves to tackle the country’s housing shortage<\/a> for many years. A target currently exists to create 300,000 new homes per year, but so far this goal is not being met.<\/p>\n

Last year, around 250,000 new homes materialised. While this falls short of the desired figure, it is in fact the highest rate of housing creation in a decade, according to Centre for Cities<\/a>. The think tank also points out that the so-called shortage is by no means national, with some areas having more than enough housing stock while others fall short.<\/p>\n

Land banking: are developers to blame?<\/h4>\n

One idea regularly touted is that housing developers are responsible for much of the dearth in supply. These developers are allegedly “land banking<\/a>” to make hefty profits without actually having to build on the land in question.<\/p>\n

This is where undeveloped land is purchased purely as a speculative investment. Landowners hold onto this land as it rises in value, without any action on their part. They can then sell the land, or get planning permission and sell for an even greater profit. During the time the developer owns the land, it sits empty. In theory, this land could be hugely valuable in tackling the housing shortage.<\/p>\n

However, a new study exploits this theory as false, and proves there are other, bigger issues. The Land Promoters and Developers Federation (LPDF) teamed up with Lichfields to “debunk” the land banking myth. Their research found that the UK planning system<\/a> is actually causing serious delays to housing delivery, and the actual incidence rate of developers hoarding land for profit is questionable.<\/p>\n

Planning system needs an overhaul<\/h4>\n

The report explained that the existing planning and development process is complex and “with risk”. It states the mismatch between planning permission granted and housing output can be explained by the following issues:<\/p>\n