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Sajid Javid’s interview in today’s Times casts him as going to “war with NIMBYs and land bankers”.

It’s not entirely clear what that “war” will entail. The idea of a “use it or lose it” rule for developers is apparently intended to prevent them hanging onto land rather than getting on with building.

There is already a partial rule along these lines on planning permissions: they expire after three years unless work is begun.

In some cases that spurs developers to get on with things, though others simply do the minimum to get round it. If you’ve ever seen a building site where a little bit of activity seems to happen from time to time, over the course of years, this rule is very possibly the reason why.

For other house builders, their current business model involves getting permission for a large site, but only building a few houses at a time, selling the newly-built properties as they go to ensure cashflow keeps up with costs.

What the Housing Secretary seems to be considering is an extension of this rule to require permissions to be entirely fulfilled within a certain time. This would mean a firm would need to obey a set “build-out” period by which time all the applied-for houses would be completed.

As with the existing rules, that will probably produce some benefits in terms of increased housebuilding. But it will not automatically produce the full leap one might imagine – some builders might well be unable to driver economically on such a basis at their current scales, so would simply apply for smaller schemes one after another.

More seriously, there’s also a question about what happens if a company gets into trouble, or if there’s a downturn across the industry. Stripping a development firm that is already in difficulties of existing permissions on which it has been holding off in order to try to survive could push it over the edge by devaluing its remaining assets. They might not be sympathetic actors on the public stage right now, but a measure that could one day make a downturn more severe is quite an important unintended consequence.

In the race to hit those huge house-building targets that the Government has set itself, however, ministers might judge that a price worth paying.

30 comments for: Javid’s search for the key to a housebuilding revolution continues

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