Grant Leggett, executive director at Boyer

Why incentivising developers for quick delivery might be a better option

In its recent revisions to the national planning policy framework, the government committed to ‘build enough of the right homes in the right places with the right infrastructure’.

Unfortunately, it has set out to achieve this by blaming the failure to do so on developers — specifically ‘slow developers’.

Michael Gove tabled an amendment to the Levelling Up and Regeneration Bill (LURB) in a similar vein.

The amendment would require developers to report on the build-out rates of residential planning permissions and enable councils to take account of applicants’ records of delivery, in deciding whether to approve or refuse future applications. 

But at the same time, it seems that the government is scaling down on the 300,000 housing target it set out in the 2019 Conservative manifesto.

It is hard to imagine how demand can be met in current circumstances.

What would the need to report on delivery and its consequences for future applications mean for developers if targets are withdrawn?

I will skip past the nuisance impact of this and the question of how over-stretched local planning authorities will resource the administration of this new reporting task. 

Developers’ main concern will be that planning permissions can quickly change from being a benefit they have earned to a millstone around their necks. 

Securing planning permission will mean they enter into a new contract to ‘deliver or else’ — the ‘else’ being they risk being blacklisted on future applications. 

I also don’t think it’s clear what justification developers will be able to rely on in explaining away non-delivery of a permission. 

Developments sometimes just go wrong, despite the best endeavours. 

They would at least need comfort that misfortune in one instance would not mean they are fettered in future. 

Ultimately, the amendment could mean developers will either make fewer applications or refuse to sign Section 106 agreements unless they are absolutely certain they can be delivered. 

This will unduly affect smaller developers who are already most disadvantaged. 

Like it or not, a lot of smaller developers’ business is based on selling on land with permission to other parties who have the capability to build. 

While building is riskier than ever at the moment due to uncertainties around build costs and supply chains, there is also a looming threat of interest rate hikes and decreasing residential property values.   

Developers would of course welcome some carrot along with what seems like a weighty stick.

Exploring a form of incentive for quick delivery might be a better option, rather than a punishment for non-delivery. 

This might be a fast-track for developers that have a positive record of delivery, or a ratcheted infrastructure levy that encourages development more quickly.  

In my opinion, the LURB is increasingly becoming a NIMBY charter that could tragically stifle delivery.

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