LGA says penalties should be given to slow housing developers

Developers who do not finish building before planning permission expires should face penalties, says local authority representative, the Local Government Association…

The pressure is on to get the nation building. Government targets to deliver new affordable housing across the UK are certainly ambitious (and perhaps ultimately unachievable), but nevertheless developers are attempting to build enough properties to meet demand.

To ensure targets are met the government has put a number of measures in place, enabling the mass housebuilding programme promised to take place. These measures include removing barriers surrounding planning permissions, making it easier for developers to build on brownfield land, and eliminating some of the infrastructure responsibilities faced by developers.

However, despite this assistance new research has revealed a number of developments across the country have failed to be built, even though they have the necessary planning permission in place. According to the Local Government Association (LGA) a total of 475,647 homes with planning permission remained incomplete during 2014-15. This figure rose from 2012-13 when the number of “unimplemented planning permissions” stood at 381,390.

Housing spokesperson for the LGA, Peter Box, said the figures proved the planning system was “not a barrier” to construction. Almost 500,000 more approvals were granted than houses built, meaning something else was stopping the process.

“To tackle the new homes backlog and to get Britain building again, councils must have the power to invest in building new homes and to force developers to build homes more quickly,” he said.

“Skills is the greatest barrier to building, not planning.

“If we are to see the homes desperately needed across the country built, and jobs and apprenticeships created, councils must be given a leading role to tackle our growing construction skills shortage, which the industry says is one of the greatest barriers to building.”

A spokesperson from the Department for Communities and Local Government denied there was a problem, stating there had in fact been “a 25 per cent increase in the number of new homes delivered over the past year alone”.

He added: “Alongside this we’re working closely with developers to ensure it [Britain] has the skills it needs – and saw 18,000 building apprenticeships started in 2014.

“We’re also directly commissioning thousands of new affordable homes and recently doubled the housing budget,” the spokesman added.

The LGA said builders should be made to pay full council tax on homes that remain incomplete before the original planning permission expires. This would prevent the “bumper backlog” of homes waiting to be built in England—a figure which has “grown at a rapid pace over the past few years”.

However, Brian Berry, Chief Executive of the Federation of Master Builders, warned imposing council tax on unbuilt homes could have a significant impact on new developments undertaken by small housebuilding firms.

He said: “The measure could deliver the opposite of what it hopes to achieve by reducing the number of smaller housing developments. SMEs already face serious challenges in terms of access to finance and scarcity of small sites.

“For small house builders to be liable for Council Tax on properties which can’t be built would add yet another layer of risk and act as a further deterrent to smaller developers.

“It is already commonplace for local authorities to start charging council tax on homes that are incomplete – sometimes before even the basics, such as plastering, have been finished. It seems there’s now a danger of Council Tax being charged if you do build and also charged if you can’t build. That can’t be right,” he said.

“On Monday, the Government recognised that empowering SMEs by releasing smaller parcels of land could hold the key to increasing the number of homes being built – along with some local authorities which are enabling more small sites to be brought forward. If all councils were similarly bold, they would stand to benefit from faster rates of house building completion, thereby achieving their targets while also stimulating the local economy.

“There’s a huge convergence of interest between local authorities and SME developers, and we hope that we can work together in the future on realising what is ultimately the same end goal – to get more homes built.”

The figures from the LGA do show a worrying trend to get properties built, despite planning permission being secured. Home Builders Federation’s John Stewart said the reason for these issues was the length of time it takes for developers to gain permission. He said “speeding up the rate at which permissions are granted” was key to ensuring a “significant, sustainable” increase in the number of new homes.

“Too many sites are stuck in the planning system, with an estimated 150,000 plots awaiting full sign-off by local authorities,” he said.

He also said it was not the case of developers holding onto land in order to see its value increase—a process called “land banking”.

If the nation is to meet the targets set by the government all sides involved in the planning process will need to work together to overcome any barriers standing in the way.