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One-Third of Homes With Planning Permission Are Not Built

New research published by Shelter suggests that nearly one out of every three sites that have received planning permission for housing have not been completed in the last five years.

Shelter found that only 68% of these sites had completed properties built on them during this time period, which suggests that 320,000 homes remain unbuilt despite the green light having been provided. This suggests that landowners and developers are ‘land banking’, or sitting on the land and waiting for its value to go up.

The deficit is especially high in London, where 52% of the comprehensive planning permissions granted for residential properties have been completed during the past five years, with a year-long interval between permission being given and a home being constructed. This translates to a shortage of 106,968 homes with planning permission during that time.

Areas around London, on the other hand, have been witnessing more building activity, with 86% of homes with planning permission having been completed in the east of England and 71% in the South East.

Specialists in Construction Insurance


This geographical disparity can be explained in part by the more challenging nature of land development in London, where brownfield land that takes longer to prepare represents the average site condition.

Anne Baxendale, Shelter head of communications, policy and campaigns said that the UK’s difficult housebuilding system enables developers to realise greater profits if they sit on land instead of building homes. It’s a practice that is especially prevalent in the capital.

Ms Baxendale said that the situation is more positive outside London, where developers benefit from rising house prices and lower land costs. More homes with planning permission are, therefore, actually being built.

Developers deny accusations of land banking, countering that they actually realise more profit when they build. The Shelter research also suggests that during the same five-year period, the profits of the country’s five greatest housebuilders went up by 388%, supporting faster recovery from the financial crisis.

The housing white paper released by the government in February recommended that councils be granted more authority to order compulsory purchase orders on land that was not being built upon.

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