It’s fair and quite widely accepted to argue that developers in the UK hold substantial control over the amount, quality, and location of what gets built, even if not absolute. Let’s break that down:
Amount:
- Land banking is a well-documented practice where developers hold onto land with planning permission without building — thereby restricting housing supply while values rise.
- Planning approvals do not guarantee delivery — local councils often approve far more homes than are actually built, because delivery is in the hands of private developers.
- This leads to the situation where the planning system gets blamed for delays, but the bottleneck is frequently developer-led.
Location:
- Developers often choose sites with the highest profit margin, which may not align with sustainable planning or local housing needs.
- Strategic land acquisitions (especially outside Local Plans) enable them to pressure councils through appeals, especially where the 5-year land supply is in question.
- They can target areas with weaker planning resistance or underfunded local councils, using their legal resources to tip decisions in their favour.
Quality:
- Build quality in mass developments is often criticised — due to cost-cutting, minimal compliance, and limited oversight.
- Even when councils attach conditions, enforcement can be weak. Developers may negotiate away affordable housing or quality conditions post-permission using “viability” assessments.
- There’s little incentive to build for long-term quality since many homes are sold on quickly and warranties are short-term.
Why this is an issue:
- The current UK system relies on private-sector delivery of public goods (housing) without firm enough levers to enforce standards or timelines.
- Local authorities have no power to compel building on approved sites, nor to demand development exactly where it’s needed most.
- Planning policy is reactive, while developer strategy is proactive and commercially driven.
Why this is an issue:
- The current UK system relies on private-sector delivery of public goods (housing) without firm enough levers to enforce standards or timelines.
- Local authorities have no power to compel building on approved sites, nor to demand development exactly where it’s needed most.
- Planning policy is reactive, while developer strategy is proactive and commercially driven.
So, yes:
While the state sets the rules, developers — through financial leverage, legal tactics, and control over land — can significantly shape what gets built, where, and when.
Immediate Remedies: Could Profit Caps & Delivery Penalties Work?
1. Attach Profit Cap Conditions to Planning Permission
- What it means: When a developer applies for permission, a maximum allowable profit margin (e.g. 15–20%) is agreed upfront — above which windfall profits are recaptured by the local authority (through mechanisms like overage clauses or taxation).
- Why it matters:
- Reduces speculative land-flipping
- Incentivises real development, not just planning permission hoarding
- Brings land values down to more realistic levels (since developers can’t chase inflated margins)
In effect, this makes planning permission less of a “get-rich card” and more of a tool for actually building homes.
2. Introduce Penalties for Delayed Build-Out
- What it means: Developers are given a strict timetable — e.g. 12 months to start, 3–5 years to complete. Failure to deliver = financial penalties, clawback of permission, or restrictions on future bids.
- Why it matters:
- Forces developers to build, not just bank land
- Prevents artificial scarcity that keeps prices high
- Helps councils plan infrastructure, school places, etc.
It realigns delivery with public need, rather than profit timing.
3. Time-Limited, Non-Renewable Permissions
- What it means: If developers don’t use the permission within a defined window (e.g. 3 years), it expires and cannot be automatically renewed.
- Why it matters:
- Ends “landbanking by stealth”
- Encourages efficient, committed applications
- Returns control to local planning authorities
4. Require Viability Reassessment If Delivery Is Delayed
- What it means: If a development stalls, the original viability claims (used to reduce affordable housing or community contributions) must be reassessed. If the market has shifted, public benefit must increase.
- Why it matters:
- Prevents developers from claiming poverty upfront, then reaping massive returns later
- Builds in accountability and transparency over time
Summary: What You’re Proposing = Realignment of Incentives
| Problem | Your Remedy |
|---|---|
| Developers profit most from permission, not delivery | Profit caps linked to permission |
| Delays are profitable | Penalties for delay and expiry of unused permissions |
| Planning system is gamed for maximum return | Build quality and pace become central to profit |
This would reshape the system from one that rewards speculation to one that rewards actual housing delivery — on time, and in the public interest.