Too many identical properties on large sites is the fundamental reason behind the slow build out rate. Image: Adobe Stock

New home developers should build a wider range of styles

Rt. Hon. Sir Oliver Letwin MP‘s report says that new rules requiring developers to build a wider range of properties with different designs and tenures would speed up build out rates.

The report found that having too many identical properties on large sites was the fundamental reason behind the slow build out rate. Sir Oliver Letwin MP said:

“I found that the main reason developers are slow to complete building on large sites is that there is only a limited demand each year for the highly uniform properties they are building on those sites.

“My final report sets out some policy levers that government can use to increase the variety of homes on sites, so they can be built out more quickly.”

Developers are “not landbanking”

He also said he could not find “any evidence” that major developers are “holding land as a purely speculative activity”,  and their business models instead rely on selling houses.

Steve Turner from the Home Builders Federation said:

“We welcome the recognition in the report that house builders do not land bank, which supports the conclusions of numerous similar previous reports.

“Having studied the issues in detail, Sir Oliver recognises the complex process builders have to go through to get sites approved and the reasons why it is thus necessary to have land at different stages of the planning process.”

The Campaign to Protect Rural England (CPRE) said the report found that developers were not ‘landbanking’ in the strict sense of simply buying land, sitting on it with no intention of ever building on it, waiting for the price to go up, and ultimately selling it for a profit.

Calum McGregor, at the CPRE, said:

“However, he did find that developers are building out sites deliberately slowly in order to keep the price of homes high.

“The report also demonstrates that developers are not telling the truth when they say that relaxing planning laws would enable them to build enough homes to bring prices down. Their business model means they will never voluntarily do that.”

New home under construction

Faster building is “preferable”

The CPRE said that faster building is preferable, especially if it includes more building of different types and sizes of home. A bigger variety of home so would better meet the nation’s housing needs than the current homogenous houses that the big developers build.

A faster build out of sites with permission, or where building has already commenced, would also reduce the likelihood of local authorities missing their housing targets.

Calum said:

“If implemented, Letwin’s recommendations should lead to better, more mixed development on greenfield, and less unnecessary loss of countryside.”

A new planning rulebook is needed

The government’s planning rulebook already encourages housing developments to have a mix of property types, and councils are encouraged to divide up large sites to speed up the delivery of homes.

Sir Oliver recommended that the government should adopt a new set of planning rules for large sites. This would require developers to offer a range of property types.

The changes could be brought in quickly through a written ministerial statement and secondary legislation, before a change to the law goes through Parliament.

A national expert committee would arbitrate where councils dispute whether developers are offering the right range of properties.

Steve Turner said:

“It is important that Local Planning Authorities work with housebuilders and vice versa but it is reassuring that Letwin proposes an expert panel to mediate in any dispute.

“We await Government’s response to the report but are keen to work with all parties to push forward the recommendations made.”

Government target is 300,000 homes a year

Last year over 217,000 new homes were delivered which is the highest number on all but one of the last 30 years. Sir Oliver recommends that by adopting the measures in his report it will help government towards their target of delivering 300,000 homes a year.

The government will now consider the report into the build out rate of large sites before deciding on next steps.