Changes to the levelling up and regeneration bill allowing councils to withhold planning consent to developers slow to build on a site are counterproductive, claims the industry.

They argue that land banking is a myth and that developers are keen to build on sites as soon as possible to gain a return on investment.

Home Builders Federation, HBF, planning director Sam Stafford told Construction News: “Repeated independent investigations have concluded that homebuilders do not land bank.

“Builders are always keen to get on site as soon as possible and get a return on this investment, but there are many influences over how quickly a site can be built out.”

Economic conditions, finance, labour, supply shortages and the new building safety requirements are among the factors affecting prompt delivery.

The British Property Federation, BPF, has warned the government that the amendment to the bill could hamper future housebuilding.

“I think the amendment means well, but could be counterproductive, in that developers will not want to apply for planning permission until they have all their ducks in a row,” said BPF policy director Ian Fletcher in an interview with Construction News.

Councils guilty of land banking

The National Federation of Builders, NFB, said local planning authorities often allocate sites with outline planning permission but delay giving full planning permission or signing off a site.

“If there is so much concern about land banking, perhaps the government should force councils to give up their own copious amount of land, as under their own narrative, it is clearly being ‘banked’,” said NFB planning and policy head Rico Wojtulewicz.

Property finance intermediary Hank Zarihs Associates said it would help SME developers if councils could speed up the planning process and create a small sites list available to smaller local builders. The brokerage added this would make it easier for a wider range of lenders to offer development finance to SMEs.

The amendment to the levelling up and regeneration bill requires developers to report annually to councils on their progress. It also gives local authorities the power to block planning proposals from builders who have failed to deliver on the same land.

The bill is set to have its third reading in parliament next week.

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Shiraz Khan