Log in | Register

Report suggests housebuilders’ land banks are ‘reasonable’

Words: Laura Edgar
House building / iStock

Housebuilders’ land banks are ‘reasonable’ and it is ‘too simplistic’ to say they are not pulling their weight, the author of a new report has said.

The Role of Land Pipelines in the UK Housebuilding Process, produced by ChamberlainWalker and commissioned by Barratt Developments, notes that many point to increasing numbers of planning permissions, which stands at more than numbers built.

This leads to housebuilders being blamed for the housing shortage.

The economics consultancy said this is too much of a “simplistic” view of the situation. The report features new data, it continued, suggesting housebuilders’ land banks are “reasonable given a number of factors”.

The company explained that planning permissions are not always a green light to build.  “Not all ‘detailed’ planning permissions are ‘implementable’ – for example, they often come with strings attached by planning authorities, notably ‘pre-commencement conditions’, or other non-planning requirements must be fulfilled before a single brick can be laid.”

The reports states that at any one time, builders have started to build 60 per cent of their detailed planning permissions, which suggests there are hold-ups with the other 40 per cent. Of a total 685,000 planning permission on sites comprising 20 homes or more, 130,000 are outline approvals.

Additionally, not all land is controlled or owned by builders; public bodies, land promoters and other stakeholders own it. The report suggests that builders hold less than half of all planning permissions, with 55 per cent held by non-builders.

ChamberlainWalker said this “goes some way” in explaining why not all permissions are being built out.

The report says the size of land banks depends on the length of the development pipeline, which includes four phases: pre-planning application; planning application to planning permission; planning permission to start on site; and under construction to completion.

The pipeline is usually expressed in the number of years it takes to navigate land through the phases. Previous estimates suggested that it took up to 3.2 years to go through the post-permission phases, but new data suggests it now takes four years for sites of 20 homes and more.

The increased length of time for post-permission phases could be a result of the increasing number of pre-commencement conditions.

The report notes government statistics that suggest that 10 per cent to 20 per cent are not started on because the permission has expired, with 15 per cent to 20 per cent submitted as a fresh application.

“This goes some way to explaining why new planning permissions are higher than new-builds. It also explains why ‘land banks’ need to be higher than the pipeline to allow for planning permissions that don’t make it through. Data in the report suggest – alongside a post-planning permission pipeline now of four years – a post-planning permission land bank of 5.4 years.”

Richard Blyth, head of policy at the RTPI, said: “We welcome a systematic look at the issue of land banking. It is clear that a variety of tenures, a variety of kinds of sites and variety of providers are essential as we try to tackle the housing issue. Our key position paper shows that 35 years of ‘planning reform’ has not delivered and we need new answers.”

The report can be found on the ChamberlainWalker website (pdf).

Image credit | iStock