Labour Reveals Its Land Banking Policy
As the Coalition government presses ahead with plans that will lead to a further increase in the demand for housing through the ‘Help to Buy’ scheme. Labour has revealed its Land Banking Policy in an attempt to stimulate the supply of a further 200,000 new homes a year by 2020.
Labour leader, Ed Miliband is threatening developers with expropriation if they fail to build appropriately, attempting to free up lots of land at greatly reduced prices – triggering development on once stagnated pastures.
However, Miliband seems to be failing to grasp the underlying principles behind land banking and prefers to play politics, stoking feelings of envy and jealousy as opposed to tackling the root cause itself. Developers hoard land for a variety of reasons, none more so than the arduous process of gaining planning permission, with the UK having one of the most restrictive planning policies in Europe. From personal experiences at Ducalian we have found the planning process both time-consuming and expensive – suppressing investment and ultimately growth.
It seems as though Miliband is forgetting that the viability of a development is dictated by simple economics such as the current housing market and the requirement of developers to hold back stock in order to reduce exposure to planning risk and keep output smooth.
The solution is to tackle the root cause and deregulate planning rules whilst increasing the efficiency of the planning system; the time it takes to obtain planning permission for a simple change of use of a building takes months rather than days. It is time to put politics aside and let common sense prevail.