Let councils tax slow developers, says LGA

7 Jan 16

Councils have called for additional powers to charge developers council tax if they let planning permission expire without completing construction of new homes.

In a study released today, the Local Government Association found that planning permission had been granted for 475,647 homes in England, which had not yet been built.

This is a record number of unimplemented planning permissions, up from 381,390 in 2012/13 and 443,265 in 2013/14.

The LGA also urged the government to free councils to invest more in building homes by lifting existing limits to the Housing Revenue Account borrowing as well as taking action to address skills shortages.

LGA housing spokesman Peter Box said the figures conclusively prove that the planning system is not a barrier to housebuilding.
“In fact the opposite is true, councils are approving almost half a million more houses than are being built, and this gap is increasing,” he stated.

“While private developers have a key role in solving our chronic housing shortage, they cannot build the 230,000 needed each year on their own. To tackle the new homes backlog and to get Britain building again, councils must have the power to invest in building new homes and to force developers to build homes more quickly.”

According to the report, produced with researchers Glenigan, developers were taking longer to complete work on site. It now takes 32 months, on average, from sites receiving planning permission to building work being completed – 12 months longer than in 2007/08.

Last month, the LGA launched a housing commission to examine what other barriers to housebuilding exist, and what local authorities could do to increase the supply of homes.

Responding to today’s figures, the Federation of Master Builders said that the imposition of council tax on unbuilt homes would increase the risks of bringing forward new developments by small house builders.

Chief executive Brian Berry stated: “The measure could deliver the opposite of what it hopes to achieve by reducing the number of smaller housing developments.

“For small house builders to be liable for Council Tax on properties which can’t be built would add yet another layer of risk and act as a further deterrent to smaller developers. It is already commonplace for local authorities to start charging council tax on homes that are incomplete – sometimes before even the basics, such as plastering, have been finished. It seems there’s now a danger of council tax being charged if you do build and also charged if you can’t build. That can’t be right.”

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