Firms’ grip on housebuilding ‘must be broken’, claim MPs
THE GRIP on housebuilding by a handful of major developers must be broken to solve the country’s housing crisis, a parliamentary committee has claimed.
MPs found the market is reliant on an “alarmingly small” number of firms that have little incentive to increase building rates.
The eight largest companies build more than half of all new homes and smaller builders struggle to access land for development, according the Communities and Local Government Committee.
Major firms have been regularly attacked for so-called landbanking, holding on to plots to artificially curb supply to keep high house prices.
But the committee said it was “rational commercial behaviour and a sound business model” for developers to devise schemes that allow them to cover their investment and make a profit. It called on the Government to devise incentives to encourage developers to build more rapidly and suggested councils should demand building schedules before granting planning permission.
The committee also urged local authorities to make more land available to smaller builders.
But it raised concerns about Government proposals to reform planning, warning protections for the green belt could be weakened. Rules allow building on the restricted areas only in “exceptional circumstances”, but proposals to overhaul the guidelines could allow councils that are not building enough homes to use the clause to develop the protected plots, MPs said.
Committee chairman and Sheffield South East MP Clive Betts said: “The housing market is broken. We are simply not building enough homes.”