Property developers face shake-up of planning laws

The Prime Minister has announced a shake-up of planning laws that will see property developers penalised if they ‘sit on’ purchased land waiting for land values to rise, rather than proceeding promptly with the development.

The announcement comes as part of the government’s strategy to tackle the UK’s urgent housing needs, something which it has identified as one of its most pressing domestic priorities. The government believes that too many people are being locked out of the housing market, and blames property developers, arguing that they have a ‘perverse’ financial incentive to hoard land following approval for development, rather than building any houses.

Matthew Rodgers, Partner at Bell & Buxton, a Commercial Property Solicitor with over 20 years of experience in representing property developers said of the announcement, “Large housebuilders almost certainly landbank. They release plots only once the right time has come around for them to obtain the exact planning permissions they want, or when market conditions are in their favour. However, the same can’t be said of smaller developers who are simply unable to landbank. As soon as they acquire a site, it costs them money until the site is fully developed out and the last plot sold.”

But it’s not just property developers that have come under fire. Bonuses in the construction sector which are “based not on the number of homes they build, but on their profits or share price” have also been criticised. Since 2010 there has been a rise in the number of planning permissions being granted, but there has not been a corresponding rise in the number of new homes being built.

The Prime Minister hopes that a rise in planning permissions going to developers who are actually going to build houses, and a focus on developers building the homes the country needs will result in a whole generation not being denied the dream of home ownership.

There are, of course, political points to be secured with this announcement. For some time now, Labour has been calling for drastic action to deal with the 30-year low in home-ownership and the increase in rough sleeping. Following the support of young voters for Labour in the last Election, Matthew Rodgers says, “Buying a house is a big issue for young people and if the Government can be seen to be doing something to assist those young people in that aspiration, then that might help in pulling in their vote.”

Theresa May has insisted that existing protections will be maintained, with councils only able to amend Green Belt boundaries if they can prove they have fully explored all other building options.

Matthew Rodgers contact details are below:

[email protected]

0114 220 2167


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