One of the better measures in today’s budget was a review into a practice of land banking – big housebuilderssitting on land rather than constructing homes in the hope of making bigger profits later.
Philip Hammond said that in London alone, these companies have planning permission to build 270,000 homes but are choosing not to.
The Chancellor announced an “urgent review” to find out why there is “significant gap between the number of planning permissions granted and the number of homes built.”
And he talked tough about the possible consequences:
“If it finds that vitally needed land is being withheld from the market for commercial, rather than technical, reasons.
“We will intervene to change the incentives to ensure such land is brought forward for development.
“Using direct intervention compulsory purchase powers as necessary.”
Like most of this government’s credible ideas, it was nicked off Ed Miliband.
Hammond will hope however that the policy doesn’t get the same reception from his Tory colleagues that it did when it was suggested by Labour before the last general election.
In 2013, the then Mayor of London and now Foreign Secretary Boris Johnson, compared Miliband to a recently deposed Zimbabwean dictator. He wrote in the Telegraph:
“You won’t get developers risking their cash to build, if they are told they are vulnerable to Mugabe-style expropriations and a new mansion tax.”
And when the idea was raised again in 2015, Tory MP Andrew Percy said:
“It is the sort of policy you might expect from Soviet Russia. We should encourage developers to use this land, but threatening to steal people’s land is using a stick rather than a carrot.”
We look forward to the same balanced response from the Tory papers tomorrow!
But that’s not where Hammond’s problems with this policy end. The Times revealed today that his own housebuilding company is partial to a bit of land banking:
The paper revealed that Castlemead Construction, which Hammond founded and still makes profits from, was given planning permission for four homes on a site in north Wales in 2010 on the condition that it was developed within five years.
Castlemead was given a five year extension, but the site remains empty.
This is one government report that we’re really looking forward to reading…