Developers sitting on land with planning permission will be told to “use it or lose it” if Labour get into power.
Party leader Ed Miliband is set to use his National Policy Forum speech this Saturday to outline proposals to “get Britain building again”.
He is due to announce that Labour’s Policy Review is looking at measures to encourage land-owners to start building, getting construction workers back into jobs and deliver thousands of homes.
He will say some development land is being hoarded unnecessarily, and that in too many cases land-owners are sitting on sites with planning permission as investments waiting for the value to increase because of housing shortages.
Mr Miliband is expected to say: “Nobody should be in any doubt about this Labour Party’s determination to rebuild this country, get our construction industry working again and give families a decent chance of owning a decent home for their children, just like their parents did before them. We have to change that.”
Labour will consult in the coming months on “how to get that building started”.
“All options should be on the table, including giving local authorities real power to say to the worst offenders that they should either use the land, or lose the land,” he will add.
“Permission to build should mean land-owners build. If there is unnecessary hoarding, developers should be encouraged to do what they are in business to do: build houses.”
According to the LGA, planning permission has been granted for 400,000 homes – equivalent to a city the size of Birmingham – which have not yet been built. It said in London alone, 45 per cent of land with planning permission for housing is in the hands of firms that do not build.
Options include giving local authorities “use it or lose it” powers such as charging developers fees for unnecessarily sitting on land with planning permission or, as a last resort, issuing a compulsory purchase order.
Shadow chancellor Ed Balls recently said that if the entire infrastructure boost recommended by the International Monetary Fund was spent now on housing, it would allow the building of around 400,000 homes across the country and support more than 600,000 new jobs in construction, including 10,000 apprenticeships.
Mr Miliband will add: “For decades now, Britain simply hasn’t built enough homes. Generation after generation knew we had to, but it never happened.
“The result has been that the prices of houses and flats have gone up and up and up, even in these difficult economic times.”
Research shows that the average time taken to complete a private development has risen from 20 months in 2007/08 to 25 months in 2011/12. In London it is 30 months.
However, planning and urban design consultancy Turley Associates hit back at the “myth” of land hoarding, saying the proposed powers would not “help build a single new home”.
Director and head of the residential development sector Peter Stacey said: “Housebuilders buy land to build homes – they are not land companies. We act for housebuilders across the country and have yet to see any evidence of land banking. It is, quite simply, a myth and to tax a myth is bad policy.”
Mr Stacey added: “The market is not being artificially constrained by housebuilders. Political inertia at a local level continues to stifle the availability and range of sites needed to meet market demand. Good sites are developed quickly, poor sites more slowly.
“By far and away, the largest land bank is held by the public sector. The Labour Party would do better to find ways to encourage local authorities to maintain their five-year land supply as this will deliver new homes where they are needed, rather than threatening housebuilders with yet another tax.”