“Britain’s developers have been accused of increasing their profits from the UK’s housing crisis by restricting the supply of new houses to keep prices artificially high.
Latest figures reveal that nearly half a million homes in England now have planning permission granted but have yet to be built. The length of time it takes for developers to complete a house has jumped from 24 months to 32.
It reignites a long-running row between policymakers and the housebuilding sector over who is to blame for the current housing shortage.
While rates of planning permission for new homes have increased by 60% since 2010, there has been a 48% increase in the number of new homes being built.
Labour MP Clive Betts, chair of the local government select committee, said the failure of the big housebuilders to speed up development was simply designed to maximise their profits.
“I think it is clear that the big developers are building at a rate to maximise their profits rather than addressing the country’s housing need,” he said.
Betts said that some developments that have had planning permission were not due to be completed for another 10 years.
He added: “These are private companies who are very simply trying to make money for their shareholders. They are restricting supply and the government urgently needs to come forward with measures to address this.”
Ministers are increasingly concerned by the failure of developers to speed up housebuilding. It has been reported that some senior Conservatives privately believe that some developers are deliberately restricting the supply of new houses to boost profits.
Brandon Lewis, the housing minister, last week gave vent to his own frustrations with developers.
“When you have got housebuilders delivering, on average, 48 homes a year on some [large] sites that’s not good enough,” he told the local government committee.
“We know they can go further. Housebuilders will talk about saturating the market. But we are aware that in too many places we are still taking 20 weeks to build a house when we can do it in three or four.”
Taylor Wimpey recently announced a record operating profit margin of more than 20% as it sold more homes at higher prices. Pre-tax profits at Barratt Homes, Britain’s biggest housebuilder, have also jumped 40% in the last six months to nearly £300m.
Housebuilders reject claims of hoarding land as property prices soar
Ministers are understood to be contemplating new measures to force up the rate of development amid fears that they will fall short of their manifesto commitment to build 1m new homes by 2020.
This could include forcing developers that buy publicly owned land to commit to rapid construction as part of the planning process.
The housing industry analyst Glenigan compiled the latest data for the Local Government Association, which was released in January.
It showed that 475,647 homes in England which have been given planning permission were yet to be built in 2014/2015.
In 2012/13, the total of unimplemented planning permissions was 381,390 and in 2013/14 it was 443,265.
A spokesman for the Home Builders Federation, which represents the industry, said the most recent government figures show there were 170,690 net additions to the housing stock during 2014/15, an increase of almost 25% on the previous year.
“The industry has delivered unprecedented increases in supply over the past two years driven predominantly by the large private sector housebuilders,” he said.
“This has been on the back of the pro development policies introduced in recent years and a general increase in demand.”
He blamed the planning systems of local and central government for the shortfall in housing.
“As a priority, it needs to work with local authorities to speed up the planning system and ensure local plans allocate enough sites of different types and sizes that are attractive to a range of companies,” he said.”
East Devon Watch 