Research shows UK’s biggest builders are not hoarding land

Of the 220,000 plots held in land banks by the UK’s biggest home builders just 4% which have planning have not yet seen work start on site, new research shows.

The report from the Home Builders Federation says it is a myth that lots of land is being held and not used at a time when the country needs hundreds of thousands of new homes.

Virtually all the remainder of the land in house builders’ land banks is in the planning pipeline and does not yet have an implementable planning consent, or is on sites where construction has already started.

Some 63% are on sites where construction is underway and 31% on sites with outline planning permission which means building work cannot start, or on sites where building is waiting on local authority discharge of planning conditions.
Across the whole industry, this means around 185,000 plots are currently in the planning system but cannot yet come into production. Also 2% of plots are on sites not being developed because they are not economically viable.

As the industry increases the rate of house building from the current historically low levels towards what the country needs, working out how to get land through the planning pipeline more quickly has to be a priority for the government, says the report.

House builders are selling many more new homes, especially since the Help to Buy Equity Loan was launched last year, which means they are building more. But they can only sustain these new higher levels of home building, and boost them even more, if they can get more sites through the planning pipeline more quickly.

‘This report is just the latest of many to debunk the myth that home builders hoard land. When you look beyond the rhetoric and the lazy accusations, the facts are quite clear. House builders do not hoard land or land bank unnecessarily,’ said Stewart Baseley, executive chairman of the Home Builders Federation.

‘The debate really needs to be about how we get the land in the planning system through more quickly to build the homes we need and not about myths. The planning process is complex, bureaucratic, costly and time consuming. As a result, house builders have to have a pipeline of land coming through the planning system to enable them to plan their businesses,’ he explained.

‘The Help to Buy Equity Loan scheme is helping people buy more new build homes. But if we are to see a sustained increase in housing supply we need to see more sites coming through the planning system. Unblocking the planning system and processing applications more quickly will be crucial. There are currently around 185,000 potential homes in the system. Finding a way to get these through the system more quickly must be a priority for government if it wants to get the homes built the country needs,’ he added.

He also pointed out that with demand for new homes increasing, home builders are building out existing sites more quickly and looking to get new sites under construction sooner so it makes no business sense whatsoever for builders to sit on land with an implementable planning permission.

Last year only 110,000 new homes were built in England against a need for 240,000 per year to meet projected housing requirements. A report by HBF in March 2014 estimated that over the preceding decade there has been a shortfall of more than one million homes compared to the numbers required in 2004.

Under the NPPF planning system every local authority is required to identify a five year supply of land for the homes needed in their area. On this measure alone, to get to the 200,000 homes a year in England, local authorities will need to be able to identify residential land for more than a million homes.