RESI: Government considers penalising developers for landbanking

The housing minister told Property Week he wanted to crack down on developers that have a “habit of putting in planning applications, getting permission, getting uplift in their land value and then not doing anything”.

The government was “looking at” encouraging councils to take a developers’ past record on building out schemes into account when they assess new planning applications, he said.

This could come in the form of central government planning guidance.

“That should be a consideration that can be taken into account the next time they come back for planning permission,” said Barwell.

He suggested a ‘use it or lose it’ policy, whereby developers failing to build on land would be stripped of it or face heavy fines, would be “too aggressive” and may discourage building.

“You’ve got to put pressure on developers to say ‘why aren’t we going quicker now?’ But you don’t want to do it in such a heavy-handed way that the effect is to get fewer homes built,” he said.

Barwell stressed the need to “balance” the changes with pro-development policies. In his speech, the minister also said the planning system was steadily improving but that more could be done.

He said charging higher fees and ringfencing the money for planning departments was an option being considered.

“Legally questionable”

Marnix Elsenaar, partner and head of planning at law firm Addleshaw Goddard, said the “stupid idea” could be “legally questionable”.

“Speeding up development is a laudable ambition, and a developers’ track record is clearly a relevant factor in decision making. But fundamentally, planning permission is gained on a site-by-site basis, and the suggestion as it currently appears would be legally questionable.”

“Planning permissions are not usually personal to developers, developers might sell sites on. It’s not always the applicant for planning permission that is building a site out.”

“Developers don’t not develop because they can’t be bothered, they don’t develop because the viability doesn’t work, because of rising construction costs, a skills shortage, things they can’t control. There’s no point trying to punish developers when there’s a whole range of other things the government should focus on.”