CoStar Column: Land bank argument over played

By Alex Bateman - Thursday, March 08, 2018 14:21

Alex Bateman, head of planning at SHW, believes the focus on land banking in the draft review National Planning Policy Framework, published this week, ignores some basic truths about how developers work.

In particular paragraph 78 of the NPPF which states that local planning authorities - when awarding planning permission - should consider imposing a condition that a development must begin within a timescale shorter than the relevant default period ‘where this would expedite the development without threatening its deliverability or viability’.

While intended to deal with the issue of land banking, this approach ignores the contract a housing developer has with the landowner. Once planning permission is achieved, the developer must pay the landowner the agreed sum. At this stage, the developer is out of pocket – it makes no logical business sense to sit on the site once the funds have been paid to the landowner.

In addition land banking is a way of planning future workload. A developer will line up sites so that as one completes, the contractors can move onto the next without having to down tools in between. It is at this juncture that the developer risks losing contractors to an alternative development site, a situation that could become more acute in a post-Brexit scenario.

Instead of concentrating on land banking, more effort should go into assessing how houses can be built cheaper to facilitate a much more affordable approach to new homes. It is the increase in build costs that are creating the biggest problems when it comes to house prices and affordability.

Alex Bateman, head of planning, SWH

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