Companies submit their landbanks to Treasury's housing review as proof they are not hoarding land to keep prices high.
Housebuilders have denied claims that they hoard land to keep house prices high.

The denials were made in the firms' submissions to the Barker review, a Treasury investigation into Britain's shortage of housing supply.

In an unprecedented move, major housebuilders have released details of their landbanks to the Barker research team to scotch claims that they rig the market by delaying their building schedules.

The claims have been made by bodies such as the Campaign to Protect Rural England and the RICS. A CPRE survey this week claimed that housebuilders' landbanks have risen 18% in the past five years.

Redrow chief executive Paul Pedley said: "The industry has been incredibly honest; we needed to put the myths to rest. We've talked the review team through our landbank – we've done it quite openly. The Treasury has understood the implications of the housing market on UK plc."

Pedley praised the Barker team. He said: "It's a very, very good team. They really are prepared to sit and listen."

In its submission to the review, the House Builders Federation also defended its members against the land hoarding accusations.

We needed to put the myths to rest; we’ve done it quite openly

Paul Pedley, Redrow

It said: "Given the long time-lags involved in development, suitable landbanks are essential to ensure a stable flow of future output."

The submission added: "Even if a large company wished to maintain a long landbank of plots with planning permission, City financial demands would make this very difficult because it would reduce the company's return on capital and damage the share price."

The HBF pointed to recent research by FPDSavills showing housebuilders' landbanks represented about two years' worth of supply. It also showed a 32% drop in the number of plots held by the larger housebuilders between 1999 and 2001.

In its submission to the review, the RICS questioned the claim from housebuilders that the planning system was constraining land supply.

It said: "The argument is gaining ground that it is housebuilders rather than the planning system that are controlling supply and releasing new homes at the level that suits them best."

Speaking more broadly about his firm's submission to the review, Redrow's Pedley said reforms needed to be made to the planning system.

He said: "The biggest issue we have is not the planning system per se. We're happy to work in any planning environment, but it has to be efficient, and it is not. First, we've got to make sure applications go through the system faster, and second, once they are through, make sure they aren't held back by section 106.

The RICS’ key demands in their Barker review submissions.

  • Greater use of compulsory purchase orders by local authorities
  • More use of off-site manufacturing
  • Open-book approach for section 106 agreements whereby housebuilders share excess profit with councils
  • Abolishing VAT on repair and refurbishment of old housing stock
  • Infrastructure investment for four growth areas in the South-east
  • More powers for Urban Development Corporations, English Partnerships and the Housing Corporation

HBF’s key demands in their Barker review submissions.

  • Sanctions against local authorities that do not meet their housing obligations
  • Early review of PPG3 – planning guidance on housing density
  • Urgently speed up planning appeal and call-ins. Simplify local development plans and give more training for councillors and officials
  • Presume in favour for housing on brownfield land
  • Shorten section 106 agreements
  • Do not require housebuilders to provide affordable housing

What is the Barker review?

Kate Barker is a member of the Bank of England’s Monetary Policy Committee and a former CBI chief economist. She was commissioned by Gordon Brown and John Prescott to find out why so few houses are built in the UK. Barker is due to publish an interim report next month (probably to coincide with the chancellor’s autumn statement), and a final report with recommendations next spring (at the time of the Budget).

As well as housebuilders, Barker wrote to landowners, housing market analysts, trade associations, housing groups, and environmental interest groups.