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Land Banking

Volume 696: debated on Thursday 10 June 2021

Motion made, and Question proposed, That this House do now adjourn.—(Rebecca Harris.)

Before the debate starts, can I ask for the Dispatch Box on the Government side to be sanitised while Christian is speaking? I know the Minister is used to not touching it until it is fully sanitised.

Thank you, Mr. Deputy Speaker, for the opportunity to bring this important debate before the House this evening, which is important not only for me and Bury South, but for many across the country. Thank you, too, for marking this, my first Adjournment debate since being elected.

We have spoken frequently both in this place and in Westminster Hall about protecting our green belt and about the need to build houses. Over the past few years, plans to build new homes on our precious areas of green spaces have become one of the biggest issues in my constituency, in Greater Manchester, and, indeed, across the country.

Throughout my time in this House, I have pledged to preserve Bury’s green belt, over at Elton reservoir and in Simister, and ultimately to protect our environment from unnecessary development. I reaffirm that commitment right here, right now, because it is a commitment to seeing the borough at the forefront of brownfield development.

I thank the Minister for having many discussions and for coping with my concerns and complaints about the impact of green-belt development. We really need to tackle some of these issues, especially the land banking issue, which I will be coming on to.

Bringing forward brownfield regeneration will deliver more affordable and, ultimately, safer and better homes for all, which is something that, as a country, we desperately need. Our country desperately needs new homes to be built, and built in great numbers, but we cannot achieve that by encroaching on our green belt to find extra space when there are plenty of empty plots already waiting to be built on.

In 2019, almost 400,000 homes were given planning permission in England, but only 240,000 were actually built. Over a 10-year period, from 2009, 2.5 million homes were given planning permission, but only 1.5 million homes were actually built. That translates to a backlog of roughly 1 million unbuilt homes.

Planning in this country is already providing more land than needed to meet the Government target of 300,000 homes a year and we should not be looking to encroach any further on our green belt. In fact, we had a manifesto commitment to not only protect, but enhance the green belt, and that is something that we, on the Conservative Benches, can make sure we hold the Minister to.

Why is there this huge disparity between the number of planning permissions granted in the UK versus the number of homes actually being built? It is not the planning system. The planning system is not the constraint on house building; it is the property industry and land banking itself. Land banking is a pitfall in our complex planning system where developers buy and store a pipeline of land and obtain planning permission for that land, with no immediate intention to build the homes that have been approved.

First, I congratulate the hon. Gentleman on his first Adjournment debate. I have no doubt that it will be the first of many. Does he not agree that, while we are sympathetic to those genuine developers who are outpriced in building on their site due to the rising price of steel, wood, plastic and other materials at this time, there are also those—and they are the ones that he is referring to—who deliberately hold land with planning permission to enhance the cost? Steps need to be taken to address those whose business is simply land banking, which can lead to price gouging. The Government, and the Minister in particular, must consider imposing penalties against these people, and one of those penalties should be taxing them heavily.

I thank the hon. Member—indeed, he is my hon. Friend in this instance—for that helpful intervention. I will certainly get on to that point later in my argument. I have a particular concern when developer A holds field X, gets planning permission and then does not build, but they also happen to hold fields Y and Z, and it is just to create a greater need to get planning permission on those. The only real benefit is to the developer and their balance sheet. As my hon. Friend said, it is very much these developers who take advantage of the planning system; it allows them to profit without the homes being built—homes that we desperately need—in the locations that we need them.

As I was saying, land banking is a pitfall in a very complex planning system where developers buy and store a pipeline of land and obtain planning permission for that land, with no immediate intention to build the homes that have been approved. Being granted planning permission can increase the value of the land by more than 100 times in some instances, but instead of building homes, the developer sells the land off for profit. This practice is purely an investment for big property developers, and it inflates land prices, making it even more difficult for people to buy the homes they desperately need. It prevents young people and families from getting on the property ladder, and it also prevents the elderly from being able to downsize and move into bungalows, because we are not building the homes that we need.

In Britain, the timescales involved in land banking are particularly long, with people seeming to land bank in some instances for between five and 10 years of their building supply, compared with other countries such as Germany, Japan, the USA and even France, which have much shorter timescales. Indeed, in some of those countries, the phenomenon barely exists, so why is the UK different? Unfortunately, it is because of our planning system.

Land banking is also posing a serious threat to our green belt as the Greater Manchester Mayor, Andy Burnham, has sought to look for extra space to build several thousand new homes by encroaching on green-belt areas such as Elton reservoir and Simister village in my constituency. I made a pledge during the election campaign to oppose those green-belt developers and find a meaningful solution so that we do not need to build on that land, and I make that commitment again to the electorate and the good people of Bury South.

I carried out a survey of my constituents recently. It found that roughly 56% of residents in Bury South felt that the green belt should never be built on, and that 95% took the view that Elton reservoir needed to be taken out of Mayor Andy Burnham’s house building plan, so if there is anything the Minister can do to assist in helping with that, it would be greatly appreciated. To add to the pushback against green-belt development, my local green-belt protection group in Bury South, Bury Folk Keep It Green, is roughly 10,000 members strong across a borough of 180,000 people, so it is a very large group. I hugely respect and admire the work it has been doing not only to bring the consensus on protecting our green belt to the fore, but to ensure that everyone in the constituency is aware of what is at risk and what could be destroyed.

The results speak for themselves. Let us listen to the people, and let us not destroy these precious areas of green space that we have pledged to protect. The planning White Paper talks about democratising a planning system that unfortunately fails far too many people. These are areas that have helped so many people mentally and physically during the pandemic, when we were all being told to go out and take advantage of our green fields and open green spaces. Indeed, I myself have taken my daughter for walks around Elton reservoir. We need to ensure that those areas are there for many years to come, so that many families can carry on enjoying them.

We need to look at changing the rules around the English planning system, ensure that legislation reflects ways to tackle the housing crisis and stop egregious cases of land banking, ensuring that land is built on and not stored. The 2017 Local Government Association report suggested introducing a council tax charge 12 months after planning permission had been granted, which would act as a disincentive for large property developers to land bank. It could also incentivise those developers to start building in the first place, further negating the need to build on our green spaces. If developers were forced to pay all that money every month, they would start building pretty quickly.

The Government should also work to bring thousands of empty homes and other types of property back into use, to ease the housing shortage and maximise the use of existing stock. The latest report suggested that there were roughly 665,000 vacant dwellings in the UK, and we need to make use of them. We are saying that we need to build 2 million homes, and those empty homes and those that are land banked represent a huge proportion of what we need to build.

I welcome the Government’s dedication and success in addressing the housing crisis and the protection of the environment. However, I urge them to reconsider the system we are currently operating in. We need a planning system that can bring about a better quality of life for all and a more sustainable future. We need a system that can bring down the price of land, capture land values for the public benefit and make housing truly affordable so that every family can ultimately benefit from the right to buy, get on the property ladder and take advantage of what we all should have as a fundamental right. I shall close by thanking the Minister for his kind words in our many conversations. I hope he will agree not only that we need to change, which is why we are bringing forward these changes now, but that we need to ensure that democracy and ultimately the people have a final say in this.

May I begin by congratulating my hon. Friend the Member for Bury South (Christian Wakeford) on securing this, his first Adjournment debate? I am particularly grateful that he has chosen a topic that is so important to his constituents and to all our constituents.

Let me begin by saying that the Government are committed to providing the homes that this country needs. The debate provides an excellent opportunity, as expressed by my hon. Friend, to discuss the Government’s position on build-out rates, which, we recognise, are an issue that many communities feel strongly about.

My hon. Friend spoke eloquently about the challenges his constituents face. It is important to recognise at the outset that Sir Oliver Letwin’s independent review of build out, which builds on that of Dame Kate Barker and many others before them, highlighted that the repeated arguments of house builders sitting on land is overstated. Sir Oliver’s work found no evidence that speculative land banking is part of the business model for major house developers or that it is a driver of build-out rates. Of course, not everybody agrees with the conclusions reached by Sir Oliver and his report. The Local Government Association, as referenced by my hon. Friend, has recently stated that in some cases there are legitimate reasons why development stalls. It could be, for example, that the land owner cannot get the price for the site they want, that the development approved is not viable or that there are supply chain or other economic hindrances to starting. However—

I thank the Minister. In the past year, we have seen a massive increase in the price of houses. In my constituency, house prices have risen 20% and that has been the case across the whole United Kingdom. It probably is not right to say now that developers could not get their price out of a site—they clearly could.

The hon. Gentleman is absolutely right. House prices have increased and that is a very good reason why we need to build more homes of different types and tenures across the country to ensure that people can get the home of their dreams either to buy or to rent. I was going to say to my hon. Friend the Member for Bury South and the hon. Member for Strangford (Jim Shannon), both doughty campaigners on behalf of their constituents, that we recognise that build out is important to ensure that communities see the homes they want and need built promptly.

The Government want homes to be built and expect house builders to deliver more homes more quickly and to a high quality standard. Indeed, we are exploring further options to support a prompt and faster build out as part of our proposed planning reforms. We are now analysing the responses to the consultation on our White Paper, “Planning for the future.” We had some 40,000 responses. That work will include pursuing further options to support faster build out of our proposed planning reforms. More details will follow.

I was interested to listen to my hon. Friend and hear ideas raised such as charging council tax on unbuilt permissions. It is an idea that has been mentioned previously, too. That will require some careful thinking because council tax is levied on properties and paid by the residents. Who would pay council tax on a permission? Would it be the developer, the land owner or the promoter? Those are questions we need to address if that option were to be further pursued.

The council tax proposal is just one idea. Obviously, council tax as a policy is open to interpretation in this place. However, there are other ideas and notions, such as land value tax as soon as an application has been granted and the land value increases. That would certainly be an incentive to get people building again. What are the Minister’s thoughts on the potential of a land value tax?

My hon. Friend is right that there are many options. I used that example because it has been positive, but it is also complex and needs to be thought through. Let me assure him that we are thinking through a number of options we can employ to ensure that more homes are built more quickly, to that high-quality standard that we expect, and that build-out occurs, as we all want to see.

We will also be looking at enforcement rules for landowners who wilfully abuse the planning system. We will talk more about that when we introduce the legislation. We know that our country does not have enough homes. It is a decades-long problem of demand consistently outstripping supply and it has undoubtedly fuelled rising house prices. Indeed, the median price in England is nearly eight times higher than the median gross annual earnings outside London. In London, it is nearly 12 times higher. How are people expected to get on the property ladder and buy their own home—even rent their own home—with such challenges? It is clear that things have to change.

Building the homes the country needs is at the heart of the Government’s commitment to levelling up across our United Kingdom. Our vision for the future of planning and home building in England has to be bold and ambitious. That is at the heart of our White Paper. It proposes changes to the focus and processes of planning, to secure better outcomes for local communities, in terms of land for homes, for beauty and for environmental quality.

Simplifying the content of local plans will be a big part of this. It will make it easier to identify areas suitable for development, such as brownfield land, and to protect the all-important green-belt land sites, which are the sorts of sites that my hon. Friend referred to. A good example of brownfield land development can be found at the East Lancashire Paper Mill site in his own constituency.

These changes will transform a system that has long been criticised as being too slow to provide housing for families, key workers and young people, and too weak in getting developers to pay their fair share towards supporting essential infrastructure such as local schools, roads, GP surgeries and clinics. It is our ambition to deliver 300,000 homes per year by the mid-2020s and one million homes over this Parliament.

Increasing the number of up-to-date local plans across England is central to achieving that goal. Local plans not only unlock land for development and ensure that the right number of new homes are being built in the right places, but they also provide local communities with an opportunity to have their say on how their local areas will transform over the coming years.

I thank the Minister for being very generous and giving way a second time. The Labour council in Bury does not have a local plan. We have been working on the Greater Manchester spatial framework but that has been pushed back time and time again, as the people say, “No.” What message can the Minister give to the Labour councillors about bringing forward a local plan, and doing so quickly?

My message to all local authorities that do not have up-to-date local plans is: “Move as quickly as you can. If you do not, you do your constituents a disservice, because you leave them open to speculative development based on the presumption of sustainable development. It means you cannot protect your land, or support the communities that live on or around it, because you do not have a plan in place.”

Home building statistics show that in 2019 to 2020 there were nearly 244,000 net additional homes, including 220,000 new build homes. That is the highest annual increase for 30 years. The 2020 housing delivery test measurement, which we published in January, shows that around two thirds of local authorities have risen to the challenge and are supporting the delivery of the homes they need. The other third need to follow suit.

My hon. Friend referred to empty homes. I am pleased that the number of long-term empty homes has fallen by more than 30,000 since 2010. We have given councils powers and strong incentives to tackle long-term empty homes, including the power to increase council tax on them by up to 300% and to take over the management of them. Councils also receive the same new homes bonus for bringing an empty home back into use as for building a new one. It is probably worth mentioning that not all empty homes are habitable without some significant expenditure, or are in places where people need and want to live, but he raises an important point. I hope that I have demonstrated the Government’s commitment to getting appropriate empty homes back into use.

My hon. Friend also mentioned infrastructure. If we are to build new homes, we must have good infrastructure to support them. We recognise the crucial role that infrastructure plays in supporting new communities and improving neighbourhoods. Our manifesto committed to amending planning rules to ensure that the right infrastructure is in the right place before people take the step of moving into their homes. That is why we announced the national home building fund in the 2020 spending review.

The fund brings together existing housing, land and infrastructure funding streams into a single, flexible, more powerful pot, ensuring that roads, GP surgeries and schools are ready for people moving into new neighbourhoods, and driving an increase in supply in the areas of greatest need over the long term. At the next spending review, we will set out our proposals for the future of the national home building fund, to deliver on the Government’s commitment to invest £10 billion to unlock homes through the provision of infrastructure. That is on top of the £7.1 billion that we have already allocated, which we believe will unlock 860,000 new homes.

My hon. Friend mentioned the Government’s commitment to building back better after the pandemic and the importance of protecting the environment. Through the national planning policy framework, we have made it clear that planning policies and decisions should minimise the effects on biodiversity from development, protect our most sensitive habitats and provide net gains. That means that opportunities to incorporate biodiversity improvements in and around developments should be sought, especially where they can secure measurable net gains for biodiversity.

We intend to go further: 2021 will be a landmark year for environmental policy because in November we will host the UN climate change conference in Glasgow. Our Environment Bill will be a pivotal part of delivering the Government’s manifesto commitment to create the most ambitious environmental programme of any country on Earth. We will make provision for a mandatory 10% of biodiversity net gain improvements for a range of developments, including house building. That will ensure that future developments result in measurable enhancements to nature, strengthening the biodiversity of our environment overall. We will also give new powers to local authorities to tackle air pollution in their areas.

My hon. Friend made important reference to the green belt, and our priority as a Government is to continue to protect the status of our green-belt land. We stand by our manifesto commitment:

“In order to safeguard our green spaces, we will continue to prioritise brownfield development, particularly for the regeneration of our cities and towns.”

We are clear that green-belt land should be considered for release only if an authority can fully evidence that it has examined all other reasonable options for meeting its development needs.

In addition, the national planning policy framework makes it clear that there should be no approval of inappropriate development in the green belt, including most forms of new building, except in very exceptional circumstances, as determined by the local authority. That means that the authority should use as much brownfield land as possible, optimise development densities and co-ordinate with neighbouring authorities to accommodate development.

We are committed to working with local authorities to turn old, disused brownfield land back into use for vibrant, exciting new places, levelling up for communities across the country. We have announced a package of measures that sets a new and far-reaching cross-government strategy to build more homes, protect and enhance the environment and create growth opportunities across the country. It includes: our home building fund, providing £2 billion of funds to support often SMEs in the delivery of larger, mostly brownfield sites through loans for infrastructure and site preparation; and £2.9 billion to support small and medium-sized enterprises, custom builders and construction innovators to build housing, including on brownfield land.

I will not give way to my hon. Friend, because I have not got very long left and I appreciate he has only just arrived in the Chamber. If he will forgive me, I will continue.

Additionally, we have made available £400 million in brownfield housing funding, which has been allocated to seven mayoral combined authorities, including that of my hon. Friend the Member for Bury South, enabling around 26,000 new homes across the region—brownfield site homes. He asked me what we can do to encourage Mayor Burnham to build the right homes in the right places in the right way. I point him to the investment we are making in the combined authority in Manchester to ensure we are unlocking the opportunity to build homes on brownfield sites and not greenfield or green-belt sites, which people understandably want to see preserved.

My hon. Friend has spoken passionately and eloquently in support of his constituents in this, his very first Adjournment debate. I congratulate him again on securing it and being such a champion for his constituents. I hope it is clear to him and to others that the Government are committed to delivering a planning system that is fit for purpose and that works for everyone.

The Gracious Speech announced that the Government will bring forward a planning Bill in the current Session of Parliament. We are working hard with our stakeholders, and with colleagues across the House and in the other place, to make sure that we get the Bill right. We want to hear people’s views. We want to ensure that we refine our proposals in such a way that we introduce legislation that works for everyone in our country and provides the right homes that the country needs. It will be a Bill that gets more infrastructure built, that will modernise the planning system and that will bring the entire system—more democratic, more engaging—into the 21st century. It will propose simpler and faster processes, giving communities and developers much more certainty over what development goes where, what it looks like and what the infrastructure should be, and ensuring that developers have to contribute their fair share to funding affordable homes.

Our reforms will empower local people to set standards for beauty and design in their area through design codes that put beauty at the heart of our system. We want to grow the supply, boost affordability and unlock opportunity, and to do so for every community in every region in our United Kingdom. I am very pleased to be able to say those words and to commend my hon. Friend for his debate.

I thank the technical and broadcasting teams for ensuring that all Members of Parliament have been able to participate in our democracy, whether they are in this iconic Chamber or not.

Question put and agreed to.

House adjourned.