Developers should be hit with tough new penalties for ‘hogging’ development land at record levels according to a new study.
The analysis found that so-called ‘land banking’ is at record levels with the worst-ever gap between planning permissions being granted and homes being built.
Data from the housing ministry revealed that in 2016-17, planning permission for 313,700 new homes was granted, but only 183,570 homes were built.
This left an annual gap of more than 130,000 homes, the largest since records began 12 years ago, says shadow housing secretary John Healey, who undertook the analysis.
Mr Healey, Labour MP for Wentworth and Dearne, called for new sanctions against developers who sit on undeveloped land to help solve the UK’s housing shortage.
Labour has already said it may compel landowners to give up sites at a heavy discount to free up land for the construction of more new homes.
The biggest gaps were in London and the north-west of England with around 50 per cent of homes being built between 2012-2017 after planning permission was given.
Mr Healey said the government needed “radical new powers” to end land banking and urged ministers to take “decisive action.”
He said developers should sign up to targets for the level of housebuilding on sites, with fines levied if these are not met.
At presents, local councils can only approve or reject applications and have no powers to compel developers to build.
Labour is proposing a new English Sovereign Land Trust to buy undeveloped land with planning permission at enforced discounts from developers.
It would be allocated to smaller builders by the new trust using powers to compulsorily purchase land at lower than market prices.
Land is usually sold to developers at a price that assumes a big rise in its value if planning consent, is obtained.
This means that land zoned for agriculture could be worth 100 times as much if it is subsequently allocated for housing by planners.
Developers deny speculating by buying up land in the hope of securing planning permission and point out that the most profit is made from actually building on it.
Healey said: “The number of new social rented homes is stuck at the lowest level since the second world war. We need decisive action, not more warm words.”
The Government has tasked former minister Sir Oliver Letwin with leading an independent review of land banking.
Housing minister Kit Malthouse said: “We’re committed to building 300,000 homes a year by the mid 2020s.
“We asked Sir Oliver Letwin to carry out an independent review into the build out rate so we can get more properties built more quickly. He will report back shortly.”