Despite? Because….

Housebuilders are sitting on enough land to build more than 800,000 homes, analysis by The Telegraph has found, raising new ­questions about efforts to increase the supply of new properties and reverse the decline in home ownership.

The total number of plots in the top nine housebuilders’ land banks has risen by 25pc in the past five years to around 838,000. That is despite a series of Government reviews and policies meant to increase the rate of building.

Land is an input into housebuilding. Land that can be built upon takes some years to put together, gain permission upon. The stock of inputs that take some years to organise will rise as annual production increases.

Sigh.

10 comments on “Despite? Because….

  1. 1989: Oh noes the global oil industry is only sitting on 25 years of reserves, we will run out and all die!

    2019: Oh noes, the housebuilding industry is sitting on a whole 4 years worth of reserves, nationalise the greedy bastards and string them up!

  2. The moment people start building houses on this land, the Telegraph will rage about the destruction of the countryside.

    What a cynical world we now live in.

  3. I’m involved in a fairly large housing scheme that will be located on some of what is now my farm. This project was first mooted in the 1990s, missed out on the Local Plan in the early 00s, put on a back burner by the crash of 2007/8, put in the next Local Plan around 2012, signed up to a developer around 2015 and is just now approaching the point when a planning permission might be granted, if the Local Authority manages to pull their fingers out and finalise the application (a process not helped by the lead planner constantly going on holiday, leaving no-one dealing with her work when she’s away). The absolute earliest a bulldozer could enter the site would be late 2020, more likely 2021, quite possibly later than that.

    Bear in mind this is not a scheme that is opposed by the planners, its actually in their local plan for where development should go over the next few decades. Despite all that, it still takes many years to get the appropriate planning permission out of the council. Other developers in the same area have had planning applications in for longer, some have had them passed, but still no houses have been built due to legal complications.

    Any developer who did not have enough digger ready projects on the books to allow for that sort of timescale for procuring new ones would be out of business is short order.

  4. But Tim, when I showed the stats a few years ago that showed that production was roughly constant despite the annual increases in landbanks, the folks on this site got very shirty with me. The stock has been rising for 10 years and production has flatlined.

  5. Could the flatlining be linked to limitations in other inputs (brickies etc) and the lack of capacity in the planning approval system? How much land in the banks is actual land or just options on said land?

  6. The Council Tax stock of properties ( England and Wales ) is available on the government website.
    The net additions number has increased in each of the last 5 years, and the increase is in line with the extant stock of properties in terms of the %s in each band, so we can’t blame it all on rabbit hutches.
    Well we can blame rabbit hutches, splits and office conversions, because that’s the standard in the UK but it was already the case 5 years ago – we haven’t become more rabbit hutchy if that makes sense.
    This could change now that it’s easier to do retail to residential conversions since 1/4/19

  7. Diogenes, it’s not the annual production that’s relevant, but the time from first proposal to start of digging. If that’s lengthened, while annual production stays constant, then the landbank also needs to increase.

  8. @ diogenes
    I didn’t get shirty – I just looked up the data from the most obvious bunch (not cherry-picked to get the result I wanted because I didn’t want any particular result) of company reports & accounts and found that the ratio of landbanks (measured in building plots) to completions was most usually constant to within a few percent either way. The monetary value of the landbanks increased because the price of land per unit increased.

  9. And don’t anyone get the idea that obtaining planning permission is the end of the process, that once you’ve got that you move straight in and start digging.

    Oh no, sirree, getting planning permission is the beginning of a several years’ dance with the local authority (read: planning bureaucrats who are mostly jobsworths and in no hurry about anything), about lots of tiny little details that have to be negotiated, lots of silly conditions they’ll write in, that have to be negotiated out again, and of course the good old “Section 21” bribes they’ll be looking for. And in the meantime some crusty will find bats, or newts, or some other daft creepy-crawly that’s for some reason more important than getting the houses built, and in those cases you might as well give up right there and then.

    I’m astonished developers have only four years’ of land banked up to be honest.

  10. “Oh no, sirree, getting planning permission is the beginning of a several years’ dance with the local authority (read: planning bureaucrats who are mostly jobsworths and in no hurry about anything), about lots of tiny little details that have to be negotiated, lots of silly conditions they’ll write in, that have to be negotiated out again, and of course the good old “Section 21” bribes they’ll be looking for. And in the meantime some crusty will find bats, or newts, or some other daft creepy-crawly that’s for some reason more important than getting the houses built, and in those cases you might as well give up right there and then.”

    Absolutely. In my case the planning permission should be signed off this summer, the S106 agreement (read long legal document detailing all the money the local authority will extract from the scheme as a thinly disguised tax) will probably take another year to negotiate. Bear in mind nothing can be done for the months of July and August, because all the council employees will be on holiday then, so no meeting of all the relevant officers will be possible, nothing can be done for 3-4 weeks around Christmas and the New Year for similar reasons, and the whole Easter/May Bank Holidays period will also be disrupted. Sept to Dec is the most productive period, followed by Jan to March, and then a short spell before the holiday season starts again. You’re lucky if you get 7-8 months of so called work out of the council workers dealing with this stuff.

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