The Land Banking Myth

The Government has made it clear that it wants to increase both housing supply and affordability of housing.  As home builders are at the centre of housing delivery and are key to achieving these objectives, they are inevitably under pressure to deliver more housing developments and affordable housing.  


Such pressure has been demonstrated by the Government’s claim that housebuilders have been maintaining land banks, a claim which has been rejected by the Home Builders Federation (HBF).  Housing demand far outstrips supply and the HBF has pointed out that home builders actually just want to get on with building out sites, constructing homes and selling the homes as soon as possible; commercially it wouldn’t make sense for home builders to sit on land which has the benefit of planning permission.  In reality, many housing developments will be in the process of construction but, if they are large and contain hundreds or thousands of homes, they will take much longer than a year to build out.  From a home builder’s perspective it is a myth that they are hoarding land; rather, their view is that it is the deficiencies in the planning system that cause their land with implementable planning permission to remain undeveloped.  Therefore, it might be more appropriate for the Government to focus on how to speed up the processing of planning applications and the time taken to sign off on planning conditions, rather than on land banking.


An empty gesture?

Intentions to improve the planning system and to incentivise developers are evident in the draft Affordable Housing and Viability Supplementary Planning Guidance (SPG) for London.  In the draft SPG, the Mayor of London proposes that developers do not have to a provide a viability assessment with their planning applications, in return for developers providing at least 35% on-site affordable housing in their new developments (and complying with any other requirements).  However, is this actually an incentive?  If a developer is able to provide 35% affordable housing on a development then a viability assessment shouldn’t necessarily be required anyway.  Some developers may still find their schemes unviable if they have to deliver 35% affordable housing, and for them, the potential benefit of avoiding protracted viability discussions with local planning authorities may not be incentive enough.  One encouraging aspect, though, is that the proposal is a tacit recognition that viability remains an issue for developers.


How we can help?

With the continuing need for home builders to deliver much-needed market and affordable housing, we at Laytons are committed to helping them do so in a variety of ways.  We deal with all aspects of the land acquisition and development process, including:

  • acquiring the sites upon which the housing or mixed-use developments will be constructed
  • Section 106 Planning agreements, which are essential to unlocking planning permissions for housing developments
  • entering into agreements for the construction of affordable housing
  • completing the disposal of affordable housing land to registered providers
  • security arrangements for residential purchases