Get building or lose your land: Labour propose strict new demands for developers

14 comments

1. Good.

   The big six house builders sit on the land and taper the completion rate to keep house prices sky high. It’s plainly market manipulation

2. Set up a wholly owned subsidiary of the gov to build houses and then use compulsory purchase orders to get the land off the tycoons that are hoarding land and then enter the market and compete as new land goes up for sale.

3. This will get down voted to hell but.

   Build faster or get fined? I wonder who will end up paying that… 

   Just commit to building council housing 

   Also not ever a fan of goverments passing laws that allow them to seize private property

4. This can only really work alongside planning reforms that make the planning system more predictable and more likely to grant planning permission in shorter timeframes.

   Production of housing is a supply chain. Developers have to maintain a constant supply of buildable land, otherwise they run out of places they can build on and they go bust. As it’s very difficult to get more buildable land (due to the planning system) and the process of getting more buildable land has lots of uncertainty built into it, developers have to ration the buildable land they have and maintain stockpiles of buildable land in case they run into trouble sourcing more buildable land (which can happen for any number of reasons, due to the uncertainty built into the planning system and the fact that planning permission is granted on a purely discretionary basis).

   The CMA have said themselves that they do not think that developers land banking is causing the housing crisis, and do not reccomend this sort of approach of making policies aimed directly at land banking, as the land banking that does happen is merely a symptom of wider issues in the planning system.

   >Conclusions

   >4.102 We do not see evidence that the size of land banks we observe held by different housebuilders individually or in aggregate either locally or nationally is itself a driver of negative consumer outcomes in the housebuilding market. Rather, our analysis suggests that observed levels of land banking activity represent a rational approach to maintaining a sufficient stream of developable land to meet housing need, given the time and uncertainty involved in negotiating the planning system.

   >4.103 A lower level of land banking would likely mean fewer rigidities in the market, since it would potentially mean more land available for purchase by housebuilders who could develop it more quickly. However, attempting to artificially reduce the size of land banks from their current level, without tackling the elements of the market that are driving housebuilders to hold them, would be likely to drive lower completion rates.

   >4.104 Given this conclusion, we do not propose any remedies directed at land banks.

   https://assets.publishing.service.gov.uk/media/65d8baed6efa83001ddcc5cd/Housebuilding_market_study_final_report.pdf

   Fundamentally, The problem is the planning system. If it was easy to source buildable land, and if there was a rules based planning system that meant that it would be possible to predict how much buildable land you could source in the future, then developers would not have to maintain these stockpiles of buildable land or slowly ration their buildable land.

5. This sounds like a great way to stop developers building even more housing. Why would they even start if they might get fined for delays? 

   It’s almost like someone hasn’t devoted a modicum of thought to the actual problem and is instead just pandering to their base.

   While peope, particularly reddit people, love the grand capitalist conspiracy house bulders are, like every other company, trying to sell as much as they can as quickly as possible. The idea they’re sitting on half built houses to keep prices high is ludicrous: they lose money doing that, not make it. All their costs are up front, often a decade up front when it comes to land (because the planning system is so slow that’s how long they need), and they don’t start actual building until they know they can sell what they’ve built. 

   As an aside anyone who thinks that building more houses will immediately make prices lower has similarly not devoted any thought to the process. Apart from the obvious economics (houses don’t get built at all if they would make a loss) new builds are a very small part of the total housing market and follow it, not lead it. The margins on house building are pretty thin (Bellway make 5.7% net) and the biggest costs are land, materials and labour, the latter of which the government is trying it’s hardest to increase.

   If the government was serious about lowering prices they would scrap our planning system entirely and use a zonal system (where permission is assumed until challenged like they do in the rest of the world) and allow building on farmland automatically. But they’re not – most of their voters are homeowners and would be very pissed off with falling house prices. So they have to do this stupid dance where they pretend they are trying to make prices fall whilst carefully avoiding any legislation that would actually allow that to happen.

6. Can we also make them build bigger houses? We have the smallest houses in Europe

7. considering the developers have been colluding for years to fix the market this is good to heae

8. This will have the opposite effect of what is intended. When has a government program ever been more effective than one in the private sector?

9. Vibes based politics. Maybe they should actually read the CMA report from last year.

10. Land banking is real. I’ve seen it first hand. Site eventually became dumping group for land tipping.

    My dream is to delist every developer from stock market. Housing with the idea of profit is just not it. People are struggling and wages can not keep up.

11. This is all good stuff, but I feel like they really need some better supply side reforms which makes housing buildings
    more competitive and actually cheaper.

    The British state has this amazing ability to intervene on private markets, fuck them up ( planning, the “privatised railways” where govt determines the exact service pattern ) then somehow manages to make the private sector take all the blame.

    Ultimately this sort of thing is just a sticking plaster to a market that the government has already rendered dysfunctional with their planning system.

12. isn’t this going to incentivize councils to refuse planning or cause problems and make sure the same firms cant come back?

    then they get themselves on some nice land for free.

13. Good, there’s a large plot next to a site I visit frequently and they’ve had rats on and off because its just a naked plot. Been like that for decades and the owners aren’t even in the UK. People who just hold land in London for the sake of how its value only really goes up are bloody leeches.

14. Lots of deleted, interesting. Anyway, so this is the great plan for 2 million homes? 

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