The government has been accused of offering a solution to “a problem that doesn’t exist” over an initiative requiring landowners to publicly declare options over land.
The new policy, set to be unveiled by planning minister Matthew Pennycook on Monday, is intended to help small and medium-sized (SME) housebuilders by boosting transparency.
The government hopes the new register will improve progress towards Labour’s target of building 1.5m homes by the next general election – a target which many in the sector say is in peril.
Pennycook claims SMEs often waste time and money by scoping out sites that they do not know are already under contract to large developers.
The proposed regulations will use the Conservatives’ Levelling-up and Regeneration Act to set up the public database of who controls development rights, to sit alongside the pre-existing public Land Registry of ownership, the Financial Times reports.
‘Solving a problem that doesn’t exist’
But leaders within the SME housebuilding sector have told City AM this new database will add unnecessary red tape at a time when the government is otherwise claiming to simplify planning.
Chris Gardner, chief executive of property financier Atelier, told City AM this policy offers a “solution to a problem that doesn’t exist,” and said the government’s time would be better spent by loosening the planning system and offering relief to the Community Infrastructure Levy (CIL).
Rico Wojtulewicz, director of policy and market insight at the National Federation of Builders, told City AM the housing system is already transparent because councils assess the ownership of sites and the likelihood of their development when allocating plots.
“The benefits to SMEs will not be as great as has been suggested,” he said.
“The only justification is the government would like land transparency but in our view, that comes with unintended consequences and ignores how planning works to enable supply.”
Steve Turner, executive director of the Home Builders Federation, told City AM: “We welcome efforts to assist small builders, but it is difficult to see what practical effect this measure will have at a time when many firms are struggling to stay afloat.”
The new policy will have a disproportionate impact on smaller housebuilders, Turner warned.
On Monday, a report claimed the falling sales output of SME housebuilders shows they are facing an “existential crisis” which could wipe out the sector for good.
Paul Rickard, chief executive of SME housebuilder Pocket Living, told City AM he welcomes transparency in principle but said he had never encountered any issues around land options.
Instead, the plan “may undermine the great work the government has done on planning reform by providing a powerful tool for early NIMBY challenge,” he said.
Land banking ‘not an issue’
The initiative is in part aimed at scuppering so-called “land banking”, by which large housebuilders snap up plots which they then hold on to for some time before developing.
Ministers cite a 2023 report by the Competition and Markets Authority which found that big housebuilders control 658,000 plots, mainly through deals which don’t obligate them to purchase the land outright.
But estate agents Savills say this report showed that complications in the planning system, not land banking, is the main barrier to housebuilding.
Turner said: “Numerous independent enquiries have concluded that house builders do not land bank unnecessarily and that a supply of land is necessary to allow the industry to function.”
A spokesperson for the Ministry of Housing, Communities and Local Government said: “The land market has been opaque for too long – and that lack of transparency hits smaller builders the hardest.
“These rules will level the playing field, get SME builders back on the pitch and help diversify the housebuilding market – which will be central to building the 1.5 million homes this country needs.”