Housebuilders face hefty fines if they slow down housebuilding or leave sites half-finished for years under new powers being granted to English councils to help deliver 1.5m homes.
For the first time, under new government proposals announced over the weekend, housebuilders will have to commit to delivery timeframes before they get planning permission, making sure they play their part to accelerate housebuilding and tackle the housing crisis head on.
Under new rules, housebuilders will also have to submit annual reports showing their progress to councils to keep them on track. While most developers want to get on and build, those who consistently fail to build out consented sites and those who secure planning permissions simply to trade land speculatively could also face a ‘Delayed Homes Penalty’ worth thousands per unbuilt home, paid directly to local planning authorities.
Those deliberately sitting on vital land, without building the homes promised, could see their sites acquired by councils where there is a case in the public interest and stripped of future planning permissions.
Large housing sites, producing over 2,000 homes, can take at least 14 years to build. But where more than 40% of homes are affordable, build-out is twice as fast, according to the government.
It is therefore also testing a new requirement for large sites to be mixed tenure by default – designed to help build more homes, including more affordable homes, faster.
Deputy prime minister and housing secretary, Angela Rayner, said: “This government has taken radical steps to overhaul the planning system to get Britain building again after years of inaction. In the name of delivering security for working people, we are backing the builders not the blockers. Now it’s time for developers to roll up their sleeves and play their part.
“We’re going even further to get the homes we need. No more sites with planning permission gathering dust for decades while a generation struggle to get on the housing ladder. Through our Plan for Change, we will deliver 1.5 million homes, fix the housing crisis and make the dream of home ownership a reality for working people.”
These decisive changes aim to support housebuilders to adapt to build more, and faster, by incentivising a model that works for developers and communities.
When major reforms to streamline the planning system were introduced last summer, the industry pledged to work with the government to build out as quickly as possible. The government says they now need to make good on that promise, with Rayner’s message to housebuilders; “they need to get on and build”.
These reforms play a key part of the government’s Plan for Change to build 1.5m homes this parliament and deliver the biggest boost in social and affordable housebuilding in a generation.
Work is already underway through the new pro-growth National Planning Policy Framework, including mandatory housing targets for councils, designed to drive UK housebuilding to its highest level in over 40 years and add an estimated £6.8bn to the UK economy by 2029/30.
This is on top of seismic planning reforms through the landmark Planning and Infrastructure Bill aimed at making it quicker and easier to build 1.5m homes and boost the economy by up to £7.5bn over the next decade.
Housing spokesperson for the Local Government Association, Cllr Adam Hug, commented: “We are pleased the government has acted on the LGA’s call for it to be easier for councils to penalise developers and acquire stalled housing sites or sites which have not been built out to timescales contractually agreed, ideally with the recovery being made at pre-planning gain prices.
“Local government shares ambitions to boost housebuilding and work hard with communities and developers to deliver new sites. Too often they are frustrated when developers do not build the homes they have approved. While intervention of this sort is a last resort, this move is crucial to help ensure meaningful build out of sites.
“The ability to apply a ’Delayed Homes Penalty’ is a power that councils have been asking for and means that local taxpayers are not missing out on lost income due to slow developers, but it must be set at a level that incentivises build out.
“Private developers have a key role in solving our chronic housing shortage but they cannot build the homes needed each year on their own. Ahead of the Spending Review, we have also set out the measures needed to empower councils to also be able to build more affordable, good quality homes quickly and at scale.”
Reflecting on the government’s plans to speed up housebuilding, Nathan Emerson, CEO of Propertymark, added: “With a population set to exceed 70m people by the end of this decade, it is right to have a sharp focus on housing capacity. The logistics of the current housing challenge does not just represent the headline number of new homes coming to the market each month, but demonstrates a true need for upgrading the entire homebuilding process from start to finish.
“The UK government is keen to see the Planning and Infrastructure Bill work its way through Westminster, however currently this has some distance to go before it becomes law. At the same time, we need to see enhanced levels of collaboration sector-wide to better guarantee the placing of new homes in the right areas at the right time.
“There must be joined-up thinking to better deliver the required skillset to support these ambitions, backed up with a robust supply chain that brings consumer value. It is essential all proposals motivate, and support all involved to rise to the current challenges, or we may see house builders deploy a much more reserved approach and commit to only projects they can make reality without encountering any danger of commercial penalties.”
