Theresa May will announce plans to penalise property developers who do not build homes quickly enough, as she uses a major speech to warn housebuilders they must “do their duty to Britain”.
The Prime Minister will criticise developers who profit from building expensive properties rather than the quantities of new homes the country needs, telling them it is time to “step up do your bit”.
Housebuilders and local authorities have come under renewed criticism from the government for their alleged failure to build or facilitate the building of sufficient homes to ease the pressure of the housing crisis.Developers are accused of land banking to deliberately push up the value of the land and reduce supply in order that they can charge a premium for the houses they do build. Several developers have hit out strongly against the claims, citing the financial burden that planning permission places on them and reiterating that embarking on the planning application and the acquisition of land is not taken lightly; that land banking is not financially advantageous and that land banking is a fallacy.The planning system is confused and generally unwieldly. Recent governments have attempted to remove some of the regulation that stands in developers’ way only to create new methods by which locals can more effectively block planned developments. However, the plans outlined in the Prime Ministers speech today fall well short of a simplification. The suggestion, instead, is that local authorities and developers alike will be penalised if they are deemed to be the barrier to the desired house-building the government wishes to see.The mechanisms for assessment and penalisation have not yet been laid out but they are likely only to confuse the planning system further and lead to an increase in popularity in option agreements and conditional contracts which delay the actual date of the developers’ acquisition of land.