Thousands of new homes promised to communities will be delivered faster, thanks to major changes to make sure developers deliver on their commitments and do not leave sites half-finished for years.
For the first time, under new government proposals, housebuilders will have to commit to delivery timeframes before they get planning permission, making sure they play their part to accelerate housebuilding and tackle the housing crisis head on to deliver security for working people.
Under new rules, housebuilders will also have to submit annual reports showing their progress to councils to keep them on track. While most developers want to get on and build, those who consistently fail to build out consented sites and those who secure planning permissions simply to trade land speculatively could also face a ‘Delayed Homes Penalty’ worth thousands per unbuilt home, paid directly to local planning authorities.
Those deliberately sitting on vital land, without building the homes promised, could see their sites acquired by councils where there is a case in the public interest and stripped of future planning permissions, showing the government’s Plan for Change means business to deliver 1.5 million new homes.
Large housing sites, producing over 2,000 homes, can take at least 14 years to build, meaning working families and young people spend years deprived of homeownership or the ability to rent an affordable home.
But where more than 40% of homes are affordable, build-out is twice as fast. The government is therefore also testing a new requirement for large sites to be mixed tenure by default – helping to build more homes, including more affordable homes, faster.
Deputy Prime Minister and Housing Secretary, Angela Rayner said: “This government has taken radical steps to overhaul the planning system to get Britain building again after years of inaction. In the name of delivering security for working people, we are backing the builders not the blockers. Now it’s time for developers to roll up their sleeves and play their part.
“We’re going even further to get the homes we need. No more sites with planning permission gathering dust for decades while a generation struggle to get on the housing ladder. Through our Plan for Change, we will deliver 1.5 million homes, fix the housing crisis and make the dream of home ownership a reality for working people.”
But Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said that housebuilders want to build homes and not sit on land they can delivery.
“Landowners, land promoters and developer investors might sell permissions, but this is because they are not the ones building the site out and making the finances work. It would help if the Government provided data qualifying their concerns,” he added.
“For developers to offer delivery timelines would require a rules-based planning system based on certainty, which is the opposite of the UK system. It also needs major utility, environmental and legal agreement reforms, to name a few barriers. If there are not a considerably high number of penalty exemptions, fewer homes will be built because builders will avoid the risk that planning politics over-rules reality.
“The biggest winners here are likely to be the lawyers.”
Neil Jefferson, Chief Executive at the Home Builders Federation, pointed to the fact that numerous independent reviews have concluded that home builders do not delay build out, not least the CMA's Market Study, published only last year.
He said: “The reality is that developers only see a return on investment when they sell homes. Having purchased land and navigated the costly and bureaucratic planning process, there is no reason not to build and sell homes.
“If we are to tackle the housing crisis, Ministers need to focus on the actual reasons as to why home building levels are flatlining, which have largely been ignored - the lack of government support for first-time buyers that is suppressing demand, and the dearth of housing associations in the market for affordable homes.
“Whilst the planning changes announced last year and the government’s ambition are very welcome, much more is needed if we are to get anywhere near the challenging target it has set.”
Cllr Adam Hug, Housing spokesperson for the LGA, said it was pleased the Government has acted on the LGA’s call for it to be easier for councils to penalise developers and acquire stalled housing sites or sites which have not been built out to timescales contractually agreed, ideally with the recovery being made at pre-planning gain prices.
“Local government shares ambitions to boost housebuilding and work hard with communities and developers to deliver new sites,” he said. “Too often they are frustrated when developers do not build the homes they have approved. While intervention of this sort is a last resort, this move is crucial to help ensure meaningful build out of sites.
“The ability to apply a 'Delayed Homes Penalty' is a power that councils have been asking for and means that local taxpayers are not missing out on lost income due to slow developers, but it must be set at a level that incentivises build out.
“Private developers have a key role in solving our chronic housing shortage but they cannot build the homes needed each year on their own. Ahead of the Spending Review, we have also set out the measures needed to empower councils to also be able to build more affordable, good quality homes quickly and at scale.”
