25 September 2013…..Along with a promise, if elected in 2015, to freeze energy prices until January 2017, Labour’s leader, Ed Miliband, in his Brighton Labour Conference speech, 2013, also addressed the housing shortage by identifying and targetting the practice of landbanking.
Responsible capitalism (instead of more spending from government) was his message. Instead of an ‘us’ and ‘them’ capitalism he wants ‘them’ to step up to the plate and share in the pain, basically – instead of hoarding land and waiting for more profitable times to magically appear.
In the wake of the unexpected nature of his speech, the media grabbed the landbanking issue and wanted to get comment on it from various sources. BBC Radio, in the evening, had media pundits commenting……and getting it wrong. By morning, with Miliband himself on radio discussing it and not having the time to strand it out, the scope for misunderstanding intent and the meaning of the term “landbanking” was getting out of hand.
The word ‘landbanking’ must not get bandied about as if it is an umbrella term somehow addressing all the different ways of hoarding land and keeping it out of use and this needs to be properly understood.
Plain vanilla landbanking is about simply purchasing sites or land (green or brownfield) and doing nothing with it. No planning applications, no s106 issues, and no intention to develop it until the time is right to either sell the land holding on at a profit or gain planning consent to either build or sell on with planning consent. In really bad instances, land is locked into huge portfolios of land holdings traded on the stock exchanges or owned by people somewhere out there in the big old world. Tracing ownership is often not even possible. And some bits of land are simply lost down a black hole of ownership which sometimes becomes Crown or ‘common’ land. This is the situation around The Old Market actually. Not many know that. Bill Cowell, former Chair of EBRA knows it, though.
Where property is just a tradeable commodity, prices must be rising or peaking and on the other hand there needs to be lots of customers who can either pay cash (they exist in large numbers) or credit is easy to obtain and repayment of loans comfortable. And if too much was paid for it in the first place, trading it on can be unprofitable, so it is landbanked.
Then there is the landbanking that is not landbanking.
At the moment, problems selling what you might build is a major blockage to building at all if the level of profit wanted is not going to be realised. Many a developer will have planning consent to build and then just not use it. They have the planning permission, have accepted the s106 obligation and they have the finance but just don’t proceed to building for whatever reason. Here in Hove we have the example of the King Alfred consent not being used because the finance was lost, Frank Gehry scarpered and no new finance was gained by the contracted deadline.
The Sackville Trading Estate which put its planning consent on hold in the wake of the global recession, etc. and because of difficulties relocating Rayners’ Optical is in this category too, especially since consent was renewed ahead of its expiry date. They are not inactive, however. The site owners have bought all the land down to the railway and along to Fonthill Road, making for a huge single site they can redevelop. But this is a justified example of how the planning system is getting in the way. And not for any of the Coalition Govt. reasons addressed by dumbing down the system and creating the NPPF. The newly acquired bit is locked into the Waste Local Plan, allocated and expected to be used for a waste transfer station as part of the city planning policy infrastructure strategy. There is negotiation deadlock on that one. How would Ed Miliband address this particular clash of priorities in creating legislation for implementation of his election pledge? Would he prioritise developer need or local authority need?
The Coalition Govt dumbed down the planning system because developers told them they found it onerous and s106 unfair. But the Govt. failed to look at things properly, to find out how many unused planning consents developers had and were just hoarding or losing because they just did not use them (like Sirus Taghan for Medina House a decade ago). About 400,000 at the moment isn’t it?
They also ignored the game developers play when they give wrong information, incomplete information, withold information that slows up determination of a planning application. This is the real reason for planning delays. Or they take a flyer and just lob in an application like a bet on the horses. Developers are surely traders and gamblers and land the chips they play with.
In the end the Coalition were guilty of trying to do their developer friends a favour, by giving them a leg up to make even more profit and inflate the property market that bit further.
The fact that Miliband’s Labour Party is giving official recognition to the fact the planning system is not the basic problem the Conservatives made of it is a great moment. That they have seized it as a chess move to make against the Tories’ position (which includes Nicholas Boles wanting enforced use of greenfield land) ahead of the 2015 General Election is something to welcome. It is valid and it is important. As the tussle between the two parties over this issue ahead of 2015, a lot will come out and the public will be the wiser, whichever way the voting goes.
This move from Miliband is a whacking great silver cross hurled in front of the Eric Pickles’ vampire that’s been killing and eating the planning system on behalf of the Coalition Govt. I hope, if he wins, that Miliband drives a stake through the Coalition Govt’s evil intent to make irresponsible land ownership acceptable.