Sept. 25 (Bloomberg) -- U.K. local authorities would be able to force builders to sell them land that’s not developed within a certain time frame if the opposition Labour Party wins the 2015 election, party leader Ed Miliband said.
Miliband said developers that hold land approved for building in the expectation that it will gain in value, a practice known as land banking, could face forced sales to local government councils to address the U.K.’s housing shortage.
“You can’t just sit on land and refuse to build,” Miliband said yesterday at his party’s conference in Brighton, England. “We will give them a very clear message: either use the land or lose the land. That is what the next Labour government will do.”
U.K. home building has fallen behind government forecasts, stoking price jumps in areas such as London where demand is highest. Councils are targeting 170,000 new homes a year, a shortfall of 51,000 a year below forecasts for a decade, according to a June report by BNP Paribas SA. Labour would set a target of 200,000 homes a year, Miliband said yesterday.
Developers “will not get near the 200,000 homes Labour is promising” unless councils release more land for development and the planning system is improved, said Stewart Baseley, executive chairman of the Home Builders Federation.
Homebuilders have 200,000 plots of undeveloped land, well under the three or four years supply the industry needs, Baseley said by e-mail, citing a Local Government Association report.
Forcing companies to build on undeveloped land would result in 30,000 more homes built in London, Steve Bullock, Labour Mayor of the London borough of Lewisham, said in a speech at the conference.
“It’s frankly unacceptable that developers are hoarding land which could be used to build much needed homes for Londoners,” he said.
U.K. homebuilders have profited as land bought cheaply after the financial crisis widened margins and the government stepped up efforts to help homebuyers. The Bloomberg U.K. HomeBuilder Index has surged more than 39 percent this year.
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