As part of the new proposals, housebuilders will have to commit to delivery time frames before they get planning permission to “accelerate housebuilding and tackle the housing crisis” and submit annual reports illustrating their progress to councils to ensure they are “on track”.
The Government said the majority of housebuilders “want to get on and build”, but there are some who “consistently fail to build out consented sites and those who secure planning permissions simply to trade speculatively”.
Housebuilders could face a ‘Delayed Homes Penalty’ worth thousands per unbuilt home, which would go directly to local planning authorities.
The Government added that housebuilders sitting on vital land without building homes promised could also see their sites acquired by councils if the case is “in the public interest” and “stripped of future planning permissions”.
It is also testing a new requirement for larger housing sites, which have over 2,000 homes, to be mixed tenure by default, which it said will speed up the build-out.
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The logic is that large housing sites can take at least 14 years to build, but when more than 40% of homes are affordable, the build-out is twice as fast.
The Government said these “decisive changes” would “support housebuilders to adapt to build more, and faster, by incentivising a model that works for developers and community”.
Angela Rayner, deputy Prime Minister and Housing Secretary, said: “This Government has taken radical steps to overhaul the planning system to get Britain building again after years of inaction. In the name of delivering security for working people, we are backing the builders not the blockers. Now it’s time for developers to roll up their sleeves and play their part.
“We’re going even further to get the homes we need. No more sites with planning permission gathering dust for decades while a generation struggle to get on the housing ladder. Through our Plan for Change, we will deliver 1.5 million homes, fix the housing crisis and make the dream of homeownership a reality for working people.”
The reforms to the planning system are forecast to add nearly £7bn to GDP by 2029-30, according to figures in the Spring Statement.
Cllr Adam Hug, housing spokesperson for the Local Government Association, said: “We are pleased the Government has acted on the LGA’s call for it to be easier for councils to penalise developers and acquire stalled housing sites or sites [that] have not been built out to timescales contractually agreed, ideally with the recovery being made at pre-planning gain prices.
“Local Government shares ambitions to boost housebuilding and work hard with communities and developers to deliver new sites. Too often, they are frustrated when developers do not build the homes they have approved. While intervention of this sort is a last resort, this move is crucial to help ensure meaningful build-out of sites.
“The ability to apply a ’Delayed Homes Penalty’ is a power that councils have been asking for and means that local taxpayers are not missing out on lost income due to slow developers, but it must be set at a level that incentivises build-out.
“Private developers have a key role in solving our chronic housing shortage, but they cannot build the homes needed each year on their own. Ahead of the Spending Review, we have also set out the measures needed to empower councils to also be able to build more affordable, good-quality homes quickly and at scale.”
HBF hits back and says housebuilders ‘do not delay build-out’
Neil Jefferson, chief executive of the Home Builders Federation (HBF), said numerous independent reviews have concluded that housebuilders “do not delay build-out”, pointing to the Competition Market Authority’s (CMA’s) Market Study on housebuilding and housebuilders published last year.
Jefferson said: “The reality is that developers only see a return on investment when they sell homes. Having purchased land and navigated the costly and bureaucratic planning process, there is no reason not to build and sell homes.
“If we are to tackle the housing crisis, ministers need to focus on the actual reasons as to why home building levels are flatlining, which have largely been ignored – the lack of Government support for first-time buyers that is suppressing demand, and the dearth of housing associations in the market for affordable homes.
“Whilst the planning changes announced last year and the Government’s ambition are very welcome, much more is needed if we are to get anywhere near the challenging target it has set.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Housebuilders to set firm delivery time frames, receive fines and lose sites due to inaction in new govt proposals
