Build homes or lose planning permissions, developers warned by government

Developers have been warned by the government that they must not hoard land (Getty Images)

Developers have been stripped of the ability to “roll forward” planning permissions as part of government efforts to encourage more housebuilding.

Planning minister Nick Boles has let lapse a measure - introduced in 2008 when builders were hit by the financial crisis - which allowed three-year permissions to be easily extended.

"This measure to extend planning permission was always intended to be temporary and, while it made sense in the aftermath of Labour's financial crash when there was no money to build, as the economy improves the focus must be on accelerating the number of homes being built to meet demand," he said.

"This ending of the measure will increase the incentive for developers to start on site before permission expires. We are also now seeking to tackle the inappropriate use of planning conditions and speed up the process of gaining non-planning consents."

Labour leader Ed Miliband has proposed new powers for local authorities to charge developers hoarding land which could be used for building - with town halls able to compulsorily purchase plots as a last resort.

He accuses developers of "sitting on" lucrative land, pointing to research which found there were 400,000 homes that have not been built despite councils giving planning permission.

Mr Boles said those policies amounted to "heavy handed...taxes and land grabs" which would slow the process and result in fewer homes being built.

"If developers fear new development taxes or state confiscation of land, they will be less willing to undertake complex land assembly projects; they will let their existing planning permissions lapse; or they will simply be more cautious in applying for planning permission in the first place," he said.

Mr Boles dismissed the 400,000 figure as a "canard" deployed by local authority chiefs, insisting the latest data showed that of 257,200 unstarted private projects, 184,600 were "progressing towards a start", 13,500 were "being sold or information was not available" and only 59,100 were "on hold or shelved".

Simon Walker, director general of the IoD, questioned the effect of ending the rollover measure - which would require fresh applications should a permission lapse.

"Obtaining permission, particularly for large projects, is a very expensive and time-consuming process," he told the Daily Telegraph.

"If builders do not have certainty that they will be able to use the land when they are ready to do so, it seems likely that it will deter some from applying in the first place."

Shadow planning minister Roberta Blackman-Woods said: "With even the Government's own statistics showing that there are hundreds of thousands of units with permission but not being built, they should support Labour's comprehensive measures to stop land banking of sites where the local community has given permission for homes to be built but developers are not building them."

PA