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Use it or lose it!

Planning Communications and Consultation

By David Scane

The development industry is used to being cast in the role of the bad guy. Whenever a Secretary of State wants to reach for a populist soundbite about building more homes, the solution often lies in ending the practice of ‘land banking’, whereby a developer will ‘bank’ a permission for a site and not build it out.

The Secretary of State for Housing, Communities and Local Government, the Rt Hon Robert Jenrick MP, is the latest in a long line of politicians to identify this as being a particular problem, hinting this week that the much anticipated Planning Bill may include a provision to charge levies on land with planning permission that had not been built out.

As with other recent Government announcements, this one bears a remarkably ‘Ed-Milibandian’ whiff about it. When the then leader of the opposition proposed introducing a ‘use it or lose it’ rule in 2013, the Home Builders Federation hit back arguing that it was a ‘myth’ that the practice takes place. His plans were met with a surprisingly warm reception from the then Conservative Mayor of London, who described the practice as being ‘pernicious’. Eight years later, and now safely ensconced in Number 10, Boris Johnson is now in a position to do something about it.

But how widespread is the practice in reality? Do housebuilders really land bank? The last time that anyone looked into the issue in detail was in 2017 when the Letwin Report concluded that delays to the planning system were not caused by developers land banking or dragging their feet, but due to a wider range of factors within the industry. 

Given that this report was only published four years ago, it begs the question of why the Government is once again suggesting that the practice is a problem, when time and again it has been proven not to be the case. 

It is also worth looking at how the Government would even be able to legislate and enforce such a levy through the planning system. Developers would undoubtedly balk at being charged an additional levy on top of CIL/S.106 commitments, particularly when they would argue that the delays in the system were not of their own making. It would undoubtedly lead to expensive and potentially lengthy legal challenges against the imposition of any fine, something which certainly would not help to speed up the process of delivering new homes. 

Jenrick has caveated the announcement by saying that it is just one of the many reforms that are being considered, and that ‘no option is being taken off the table’. Do not be surprised if this particular reform is quietly brushed onto the kitchen floor.