The Competition and Markets Authority (CMA) has published two
‘working papers’ seeking feedback on its assessment on the use of
landbanks and how planning rules may be impacting competition and
how new homes are delivered.
The separate working papers follow on from the estate management charges
working paper which was published earlier in November. Those
who wish to submit feedback to the CMA on these latest working
papers have until 6 December 2023 to do so.
On land banks, the CMA’s analysis has found that, although land
equivalent to over a million plots is held in landbanks, in most
local areas that land is held by several different builders. The
CMA is seeking feedback on this analysis, and in particular,
whether local competition is being negatively impacted in the
small number of areas where large amounts of developable land are
controlled by a small number of housebuilders.
The CMA is continuing to examine the size of land banks overall,
recognising that housebuilders need to hold a pipeline of land as
sites pass through the planning system. The conclusions of this
analysis will be published in the final report.
On planning, the CMA has developed options that the UK, Scottish
and Welsh governments may consider when reforming their planning
systems, including:
- Whether a zoning or rules-based approach to development may
help improve competition between housebuilders and boost housing
delivery.
- Making better use of councils’ limited time and resources by
requiring them to only consult statutory stakeholders, rather
than a wider group, as part of their assessment of planning
applications. Late consultee responses on development could also
be ignored.
- Having an effective housing target which reflects the housing
need of specific areas, and improving the ways governments ensure
all councils have a proper local plan in place.
Dan Turnbull, Director of Markets at the CMA, said:
As we’ve progressed our work, we’ve heard concerns that the way
large housebuilders use landbanks and complex planning rules may
be harming competition and hold up the building of new homes.
The market study is looking at all the options available which
could increase the numbers of homes being built for the people
who need them – this includes probing the issues around landbanks
and planning rules further.
We now want to get feedback on these working papers from the key
people in the industry – be that council planning departments,
builders or landowners – before we publish our findings early
next year.
More information can be found on the housebuilding market study case
page.
Notes to editors:
- Those who wish to respond to the CMA can submit their
feedback via the case page.
- The CMA will progress its housebuilding market study before
publishing a final report by 27 February 2024.
- Working papers allow the CMA to collect feedback on a range
of potential options that could potentially resolve the emerging
concerns it has identified. The possible measures set out in the
working papers should not be regarded as an indication of
‘preferred’ solutions.
- As part of its analysis of land banking, the CMA used its
information-gathering powers to secure data on the size and exact
location of more than 5,800 individual sites held in the land
banks of 11 of the largest housebuilders. It revealed land in
long-term land banks is equivalent to c.658,000 plots, while the
short-term land bank is smaller, at c.522,000 plots.
- The CMA has used two separate methodologies to identify 29
specific areas of the UK where a high proportion of land is owned
by a group of the largest housebuilders. As part of the working
paper process the CMA is inviting feedback on these methodologies
before publishing a final list in its report next year.
- The planning and land banking working papers are the final to
be published by the CMA. All feedback received will be assessed
as the CMA prepares its final market study report.
