Collinson finally understands land banking

james armstrong james36armstrong at
Thu Nov 30 21:35:42 GMT 2017

House prices aren’t the issue…..
I read in the Guardian about land banking being the cause of the crisis  in 2014-

Thanks Guardian  for helping solve the  riddle of why more houses are not built in spite of large numbers of people in housing need and  houses fetching record prices.

“Tesco unlocks its landbank  to build 4,000 homes”
(pausing to query how it is  that  Tesco are so sure to get permission to build  houses on land earmarked for  retail development and whether the houses  will actually be built and when )  we refer to The Barker Review of House Supply Interim report 2003 where just seven named  corporate house-builders  held landbanks of land surplus to their present or imminent requirement  equivalent to  732,000 (unbuilt) new houses. Compare the  total new house completions achieved in England in 2013 of 109,370.

Just one named corporate house builder , Wilson Bowden,  whose annual output in 2002 was  4,164 houses held a landbank sufficient to supply more than the whole national new house build or  33 years supply of their own requirements at their then annual rate of build.    Wimpey held 16 years supply and Persimmon 19 years supply.

 Barker explained landbanks -
“housebuilders are primarily rewarded for obtaining valuable land  rather than  responding to  consumer needs”        which translated from Whitehallese means that  they make greater profit on the rise in value of undeveloped land than they do from building houses on it!

But it is not only housebuilders who   block development by holding landbanks .
Barker  reported that Legal and General held a landbank equivalent to 79,000 housing units. Although it was unpermissioned land , Barker explained a housebuilder might hope to have it included in a local development plan.

Near Dorchester ,  in 1994 the Duchy of Cornwall was granted permission to build some 8.000 new  houses on land formerly Poundbury farm and Middle farm.
Twenty years later  many of the houses  have yet to be built.

Now to  housebuilders who wont build and insurance companies (pension Funds ?) who don’t build we have giant corporate retailers, traditional landowners …and who else ?.... withholding the  only  land earmarked for  building houses .

It is ironic that self builders  reported to the Office of Fair Trading Home-building (sic) Survey 2008 that finding land was  their greatest perceived difficulty.

The  British housing market  is broken, caused not by a game but by real life  monopoly in which the landbankers always win.

(letter in the  Guardian 23 July 2014 )

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