House builders to be forced to build new homes or lose planning permission

The planning minister, Nick Boles has announced plans to change regulations as part of a Coalition drive to accelerate construction of new homes. The move to force developers to start building homes or lose planning permission is designed to prevent land banking, where house builders hoard plots whilst they wait for house prices to rise.

This is the government’s response to Ed Miliband’s “use it or lose it” speech during the Labour Party conference in September, when he said that developers would have land seized if they failed to build on it. Under the proposals, if building work is not commenced within the time scale set by local councils, three years in most cases, house builders will be required to reapply for planning permission. 

The new rules will give local people another opportunity to object, especially to controversial developments. Currently house builders are able to “roll over” approvals granted on undeveloped land indefinitely. There are over 500,000 sites with planning permission, with work yet to start on over half of them.

Mr Boles confirmed that the Coalition had scrapped a temporary measure introduced by the previous Labour government “which allowed developers to roll forward their planning permissions. This ending of the measure will increase the incentive for developers to start on site before permission expires.” 

However, this measure is just returning the time limit condition for planning permission to where it was. There is nothing to stop any builder “starting” by constructing the foundations of just one home to permanently safeguard the planning permission for an entire development application. 

So it is surprising the Institute of Directors say it is an attempt to “undermine the ability of developers to complete projects” warning the measure could backfire resulting in fewer homes being built. 

Mr Boles said “This Government is cleaning up Labour’s mess by making sure that developers don’t hold on to land unless they are going to build on it. The measure to extend planning permission was always intended to be temporary, and while it made sense in the aftermath of Labour’s financial crash when there was no money to build, as the economy improves, the focus must be on accelerating the number of homes being built to meet demand.” 

Labour’s financial crash? Strange, most people thought the financial crash resulted from an international banking meltdown caused by sub-prime mortgages and un-regulated global trading in Collateral Debt Obligations (CDOs), bundles of mortgage securities mostly on refinanced home loans, which originated predominantly in the US!

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