The review, announced by chancellor Philip Hammond in the Budget, was established owing to the “significant gap” between the number of planning permissions granted and the number of homes built.
“In London alone, there are 270,000 residential planning permissions unbuilt,” said Hammond, “we need to understand why.”
The chancellor said that if the review finds “vitally needed” land is being withheld from the market for commercial, rather than technical reasons – the government will intervene to “change the incentives to ensure such land is brought forward for development” with compulsory purchase powers applied “as necessary”.
The move comes as the government prepares for more direct interventions for the sake of addressing the housing shortage. The Department for Communities and Local Government (DCLG) has already begun a formal process of considering intervention in 15 local authorities who have failed to produce a local plan to meet housing needs.
As a part of its push on planning reform, the government will also develop a central register of residential planning permissions from local authorities to improve information on where permissions are held and progress towards them being built out.
Nothing to fear
Stewart Baseley, executive of the Home Builders Federation, commented: “As has been proved by numerous independent investigations in the past, house builders do not land bank.”
“House builders have nothing to fear from a review of land banking,” Baseley continued, “and if it identifies non-house builders who are sitting on land and brings that forward for development it would be a positive move.”
“Any review should also focus on why so many plots that some suggest are in a builders’ land bank are mired in the planning system and identify ways to process them more quickly so they can actually be built,” he added.
Mortgage Solutions also reached out to a number of stakeholders in the construction industry – at the time of writing, a spokesperson for the Federation of Master Builders (FMB) declined to comment on the review, as did the developer Balfour Beatty.
The review will be chaired by Sir Oliver Letwin of West Dorset – with an interim report to be delivered in time for the Spring Statement, and a final report expected before the 2018 Budget.