23 November 2007
Private developers have been cleared of holding up house building by sitting on land until its value rises.
A government-commissioned review says that any move to force developers to build faster on the land that they acquire is more likely to put construction programmes at risk than add to the number of homes built.
The review by John Callcutt, a former chief executive of builders Crest Nicholson and, more recently, chief executive of the regeneration agency English Partnerships, was set up last December to look into the delivery of new housing.
His report, published on November 22, concludes that the industry can meet the government's target of building 240,000 homes per year in England by 2016 and a total of 3 million new homes by 2020.
In spite of rejecting any general action over so-called 'land banks', the review calls for greater transparency by private firms. It wants developers to set out the status of their land holdings in financial reports and communications with shareholders.
'There is no reason why government or other public agencies should not stipulate faster build-out rates when disposing of land for house building or within partnering agreements, so long as they can justify any loss of value this may incur,' it adds.
Callcutt recommends that most new homes are built in existing towns and cities. 'Unless we regenerate our towns and cities, they will decline and in turn force more development to the edge of town and out into our countryside… the proportion of greenfield development should be minimised,' he said.
Both the public and private sectors should be offered incentives to bring forward low-value sites for new homes, with local authorities maximising private finance by selecting preferred development partners.
Builders who fail customer satisfaction surveys should be barred from receiving public grants, and bidding for public land.
The review calls for an integrated house-building inspectorate, and an independent body to lead the government's drive for zero carbon housing, but it warns that the industry must not be swamped by regulatory costs.
Housing minister Yvette Cooper welcomed the report. 'We urgently need to build more affordable, greener homes,' she said.
'But we cannot afford to wait for developers who may drag their feet once planning permission has been granted, hoping to benefit from increases in land value.'
But Steve Douglas, acting chief executive at the Housing Corporation, warned that poor communication between housing providers and planners threatens the government's housing drive.
The corporation is funding an £8bn programme for at least 70,000 homes per year for rent and low-cost ownership by 2010/11.
Speaking at the Northern Housing Summit on November 20, Douglas urged housing providers to agree their development priorities early and build relationships with council planning departments.
He said: 'We cannot afford to have the stop-start approach of past programmes, where up to 35% of some of our regional investment programmes fall away because of speculative bids being brought forward.'
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