Build homes or lose planning permissions, Nick Boles tells developers

Announcement likely to be seen as response to Ed Miliband’s Labour Conference speech, in which he said developers would have land seized if they failed to use it

Nick Boles, the planning minister, wants developers to start building homes now or lose planning permission Photo: ALAMY

Developers must start building homes or lose planning permission, the minister involved has said, as part of a Coalition drive to accelerate construction.

They will no longer be able to wait years before beginning projects, Nick Boles, the planning minister, announced. The change in regulations is designed to prevent “land banking”, where developers hoard plots while waiting for house prices to rise.

Should building work fail to start within an allocated time set by a local council – three years in most cases – developers will have to reapply for planning permission.

Companies were previously able to “roll over” approvals granted on undeveloped land indefinitely.

The new rules will potentially give neighbours a second opportunity to object to controversial developments. They will be seen as a response to Ed Miliband’s speech to the Labour Party conference in September, when he said that developers would have land seized if they failed to use it.

There are currently 507,000 sites with planning permission, according to official figures. Building work has yet to start on more than 257,000 of them.

Mr Boles said that the Coalition had scrapped a temporary measure introduced by the previous Labour government “which allowed developers to roll forward their planning permissions”.

“This ending of the measure will increase the incentive for developers to start on site before permission expires,” the minister added.

The value of land plummets if a plot does not have planning permission, so ministers hope the measure will give developers an incentive to start building immediately.

Roberta Blackman-Woods, the shadow planning minister, said that the measures would simply “return the position on time limits for planning permission to where it was when Labour was in government”.

The change was also condemned by the Institute of Directors as an attempt to “undermine the ability of developers to complete projects”.Simon Walker, its director general, warned that it could backfire, resulting in fewer homes being built.

“Obtaining permission, particularly for large projects, is a very expensive and time-consuming process,” he said. “If builders do not have certainty that they will be able to use the land when they are ready to do so, it seems likely that it will deter some from applying in the first place.”

Mr Boles said that of the approved sites where building had not begun, just 59,000 were “on hold or shelved”, with the rest “progressing towards a start”. But campaigners warned that developers can claim to have started projects simply by “digging a few trenches”.

Mr Miliband wants to hand local authorities stronger compulsory purchase powers so they can buy and grant planning permission on land held back by developers.

Mr Boles described the Labour leader’s pledge as “heavy handed” and said that it would slow down the planning system.

“This Government is cleaning up Labour’s mess by making sure that developers don’t hold on to land unless they are going to build on it,” he said.

“This measure to extend planning permission was always intended to be temporary, and while it made sense in the aftermath of Labour’s financial crash when there was no money to build, as the economy improves, the focus must be on accelerating the number of homes being built to meet demand.”

Countryside campaigners welcomed the Government’s attempt to address house-building. But they warned against measures that might result in inappropriate development in rural areas.

Neil Sinden, of the Campaign to Protect Rural England, said: “We support the need for more housing and any sensible measures that result in an increase in housing provision, providing it is the right housing in the right places.

“Evidence that we’ve gathered suggests that we are getting more and more housing allocated in greenfield areas, so in the coming years we’re likely to see more housing in the wrong places.”