Letwin Review dismisses ‘land banking’ claims

A Government-commissioned review has dismissed the notion that developers are intentionally holding onto land to make money.

The review, which was published yesterday, by former minister Sir Oliver Letwin found no evidence that major developers are ‘holding land as a purely speculative activity’.

Instead the review concluded that developers rely on selling houses as their primary business model.

The report also calls for a new set of planning rules to be produced for sites with more than 1,500 homes to speed up the building process.

In particular, it recommends new planning rules which require homebuilders to offer a range of different types of properties on big sites, so they can be completed more quickly without ‘flooding’ the market with a large number of identical properties.

It also states that councils to be given a more ‘muscular role’ in guiding major homebuilding projects – and the power to purchase undeveloped land for 10 times its existing use value.

‘I found that the main reason developers are slow to complete building on large sites is that there is only a limited demand each year for the highly uniform properties they are building on those sites,’ said Sir Oliver.

‘My final report sets out some policy levers that government can use to increase the variety of homes on sites, so they can be built out more quickly.’

Responding to the report, Royal Town Planning Institute president, John Acres, said: ‘The recommendations Sir Oliver is making today reflect a full grasp of the fact that untrammelled market forces alone have not been delivering enough homes and will not deliver what the people need, and signal a much overdue strengthening of public sector planning.

‘They follow an intensive year of evidence gathering on an impressive scale involving the RTPI closely at many stages,’ added Mr Acres.

‘The review echoes the Institute’s key concern that the delivery role of the public sector has been limited in recent years to responding to private sector proposals. The review’s recommendations to change this by giving enhanced powers for local authorities to achieve proactive development is very welcome.

“We also support his core proposal that sites need greater diversity in home type and tenure, but believe this needs to be extended across a much wider section of the housing market, not only to very large sites in the remit of this Review.

‘The concept of a National Expert Committee is a novel and potentially useful one, and we welcome Sir Oliver’s suggestion that at least one of its members should be a chartered town planner. The expected role of the Committee in pre-application is vital to avoid holding up planning appeals.’

The full report is available to read online here.