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The Misconceptions of Land Banking

Imogen Holgate, of Boyer (Bristol and Cardiff), comments

­­One of the many issues in Michael Gove’s inbox at the start of 2022 is landbanking. Last May it was confirmed that the Government was considering a levy on developers that fail to build out land with planning permission within a certain time limit. Historically, it has been a persistent claim that what is commonly referred to as ‘land banking’ prevents an increase in the number of homes being built, subsequently adding to the housing shortage. It has been, and continues to be, a sticking point and there is a belief that instead of building new homes, housebuilders are deliberately holding land with planning permission to enhance its cost. This accusation has been thrown at housing developers and promoters of all sorts, but how true is it?

There are several reasons as to why there can be a significant gap in time between the granting of planning permission and its implementation. Whilst the intention is there to build new homes following planning permission, housebuilders cannot be blamed for planning permission not automatically transpiring into new homes.

Obtaining planning permission isn’t the issue – it is the barriers that developers must wade through to implement it. Take the long list of conditions that must be met before building can commence – whilst housebuilders can respond and iron out the various technicalities required by conditions, local planning authorities (LPAs) are increasingly experiencing staff shortages, meaning that these conditions are not being discharged in a timely manner.

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