“Bats and newts are not the blockers – property developers are.” This compelling statement, recently articulated by Dale Vince, a prominent British green energy industrialist, cuts directly to the heart of the housing crisis, challenging a common misconception and pinpointing a far more fundamental issue. The housing crisis is a pervasive and multifaceted challenge impacting communities across the globe, from bustling metropolises to quiet rural towns. Its manifestations are clear: soaring property prices, unattainable rents, increasing homelessness, and a growing sense of despair among those aspiring to secure affordable, stable housing. While numerous factors contribute to this complex problem—including population growth, planning regulations, and inadequate infrastructure—a single, often overlooked, issue stands out as a prime, underlying cause: land banking.
Land banking refers to the practice of developers, landowners, or investors acquiring large tracts of undeveloped land and then holding onto them for extended periods, without developing them, often with the intention of selling them later at a significantly higher profit. This deliberate withholding of land from active development has profound and detrimental effects on the housing market, artificially constricting supply and exacerbating the affordability crisis. It transforms land from a resource for building communities into a speculative asset, prioritising private gain over societal need.
The link between land banking and the housing crisis is fundamentally one of supply and demand. In any market, when supply is artificially restricted while demand remains high, prices inevitably rise. In the housing sector, this dynamic is particularly acute because land is a finite resource. Developers often acquire strategic land parcels, sometimes years in advance of any concrete development plans, not necessarily due to genuine logistical constraints, but because they anticipate a future increase in the land’s value. This speculative motive is driven by the consistent upward trend in land prices, often outpacing the general rate of inflation and even property value increases. By holding onto readily developable land, these entities effectively remove it from the active pool of available sites. This creates an artificial scarcity, even in areas where there might technically be ample undeveloped land. Across the UK, local authorities, often grappling with stringent national housing targets like Labour’s ambitious 1.5 million new homes, find themselves in a bind. The crucial point is that 1.4 million homes are already consented and waiting to be built in Britain right now. This demonstrates unequivocally that planning rules are not the problem; the issue lies in the actual building. The limited number of actively developed sites drives up the cost of land acquisition, which in turn inflates the final price of new homes. This cycle perpetuates itself, making land a more attractive investment for speculation than for immediate development, thereby pushing housing further out of reach for ordinary citizens. The motivation isn’t to build homes efficiently, but to profit maximally from future land value appreciation, operating much like the OPEC cartel, which restricts supply to keep global prices high – exactly the same is happening in house building, and it needs to end.
Several factors contribute to the persistence and profitability of land banking, with specific nuances in the UK. The most significant driver is the anticipation of value appreciation; developers often see land as a safer and more lucrative investment than immediate construction, which involves greater upfront costs, risks, and regulatory hurdles, especially given the consistent demand in the UK property market. Furthermore, in many parts of the UK, a few large developers control a substantial portion of the available land for development, giving them significant market power and operating in an oligopoly-like manner. This allows them to dictate the pace of development and the release of land, further manipulating supply to their advantage, and this concentration of land ownership can stifle competition and inflate prices. Historically, there have been insufficient disincentives or penalties for holding undeveloped land due to flexible planning permissions. In the UK, planning permissions, once granted, often have long expiry periods, sometimes up to five years, and extensions can be sought. Local councils may lack the political will or strong legal tools to compel developers to build more quickly, particularly if the developer argues market conditions are unfavourable. The financial rewards for banking land often far outweigh any minor holding costs or potential fines, making it economically rational for developers to “sit” on land. Additionally, building homes involves significant capital investment, planning complexities, labour costs, and market risks, leading developers to avoiding costs and risks by holding land and waiting for more favourable market conditions or more efficient construction methods to emerge. Lastly, land is sometimes held in a “waiting game” for infrastructure development, pending the provision of public infrastructure (e.g., roads, schools, utilities) that would increase its value and make development more viable. While this can be a legitimate reason, it can also be exploited as a justification for prolonged dormancy, with developers often seeking to offload infrastructure costs onto public bodies. The combination of these factors creates a powerful incentive for land banking, allowing valuable development sites to lie fallow for years, or even decades, across the UK, while the housing crisis deepens.
Tackling land banking effectively in the UK requires a multi-pronged approach, focusing on stronger disincentives for holding undeveloped land and more proactive measures to bring sites forward for development. One potential solution involves implementing “Use It or Lose It” policies, with stricter planning permission expiry dates and empowering local authorities with clearer powers to compulsorily purchase land where development has been unreasonably delayed. This would shift the risk from communities to landowners. A direct and impactful proposal, as recently championed by Dale Vince, is to introduce a Council Tax on Consented Land (as if built). This would involve charging local authority rates on land with permission for new homes as if those homes have already been built. This would impose a significant and ongoing cost on land banking (which is currently effectively free), creating a powerful financial incentive for developers to build rather than hold. Based on an average Council Tax of £2,000 per year, this could generate an additional £2.8 billion annually for local authorities across the UK from the 1.4 million currently consented homes. This substantial revenue stream could, in turn, fund the construction of approximately 17,500 new social homes per year (based on an estimated average build cost of £160,000 for social housing), directly boosting the supply of genuinely affordable housing. Crucially, a portion of this annual £2.8 billion revenue could be strategically ring-fenced to directly invest in vital infrastructure (such as roads, schools, and utilities) necessary for these new developments. This direct infrastructure investment would serve as a far more effective incentive for developers to build promptly than merely relying on planning reforms, as it addresses a key ‘waiting game’ factor that contributes to prolonged land banking.
Crucially, while the ‘Right to Buy’ scheme is often cited in discussions about the dwindling social housing stock, it is important to clarify that Right to Buy itself is not the primary problem. The issue arises when the proceeds from sales are not adequately reinvested into building new social homes. The core challenge remains the systemic failure to build enough new properties, a failure directly exacerbated by the practice of land banking. Therefore, policies that compel building, such as the proposed Council Tax on Consented Land, are essential not only to create new housing but also to genuinely address the long-term sustainability of social housing provision, regardless of how existing stock changes hands. This directly addresses the “OPEC-like” behaviour of restricting supply, making it clear that there is no point in tearing up environmental protections to consent more homes that developers can simply add to their land bank. The rules we need to change are ones that will get more homes built, not just consented. Planning rules are fine (the 1.4 million homes consented says so); we need changes that will oblige building. Make the developers build or pay, and they will surely build.
Beyond simply addressing the housing shortage, unlocking these 1.4 million homes would also unleash a substantial economic growth potential for the UK. Reports from organisations like the Home Builders Federation (HBF) suggest that if a target of 1.5 million new homes were met, this could generate an estimated £330 billion in economic activity and support an additional 350,000 jobs each year across the parliament. Building out these consented homes would therefore directly contribute an economic uplift in the region of over £300 billion, alongside creating hundreds of thousands of jobs in the construction sector and its extensive supply chains. This economic boost would stem from various sources, including direct construction spending, increased demand for building materials, higher tax receipts for the Exchequer, and greater consumer spending by those employed in the sector and those moving into new homes.
Crucially, alleviating housing stress through increased supply would also bring immense and far-reaching social benefits to the general population. Stable, affordable housing is a cornerstone of good health and wellbeing. Research from organisations like Shelter and the National Housing Federation highlights that poor housing conditions, overcrowding, and housing insecurity have devastating impacts on physical and mental health, contributing to stress, anxiety, depression, and respiratory illnesses. For example, a stable home is linked to better wellbeing, and building social housing (a key part of addressing affordability) could save the NHS an estimated £5.2 billion over 30 years. Furthermore, housing stability positively impacts children’s educational outcomes, as frequent moves and overcrowded conditions can disrupt learning and development, with potential savings of £2.7 billion from fewer disruptions to education. Affordable and secure housing also improves employment prospects, reducing the “long-term scarring effect” of homelessness or insecure housing, and generating an estimated £8.9 billion for the wider economy through higher employment, along with £3.8 billion in increased tax revenue. This, in turn, can lead to significant savings on benefits, with an estimated £3.3 billion saved in Universal Credit and £4.5 billion saved by local authorities from reduced homelessness over the long term. Beyond these quantifiable benefits, stable housing fosters stronger, more cohesive communities, reduces crime by an estimated £3.1 billion, and provides individuals and families with the secure foundation needed to thrive, access opportunities, and participate fully in society.
Furthermore, public sector land release could play a crucial role by proactively identifying and releasing publicly-owned land for development, potentially with conditions that mandate faster build-out rates and higher proportions of affordable housing. Diversifying the development sector is also important, encouraging smaller and medium-sized builders, self-build, and custom-build initiatives to increase competition and reduce the dominance of large developers who might have greater incentives for land banking. Reforming Planning Gain (S106/CIL) by streamlining and making more transparent the process of securing developer contributions to infrastructure (Section 106 agreements and Community Infrastructure Levy) could also help, as delays or disputes over these contributions can sometimes be used as a rationale for land banking. Finally, addressing infrastructure lag through proactive public investment in necessary infrastructure in areas suitable for development would reduce a key justification for developers to hold land. By adopting such measures, the UK could begin to unlock dormant land, increase housing supply, and reduce the speculative pressures that contribute so significantly to the ongoing housing crisis.
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Sources
This section provides the necessary context and validation for the key factual claims and proposals within the article.
Information regarding the 1.4 million consented homes, the “OPEC-like” analogy, and the proposal for Council Tax on Consented Land is attributed to Dale Vince’s response to https://www.theguardian.com/politics/2025/jun/04/labour-mps-poised-to-rebel-over-planning-bill-amid-concerns-for-nature
Estimates of £330 billion in economic activity and 350,000 jobs from building 1.5 million homes are derived from reports by the Home Builders Federation (HBF), often in partnership with organisations like Lichfields and United Trust Bank.
The estimated average build cost of £160,000 for social housing is based on research by JLL, as cited in recent housing industry news.
Data on the net loss of social homes (e.g., 650 in 2023-24) and the proportion of social rent completions (15% in 2022/23) comes from official government statistics (Department for Levelling Up, Housing and Communities – DLUHC) and analysis by housing charities like Shelter.
Quantifiable benefits related to NHS savings (£5.2 billion), education (£2.7 billion), employment (£8.9 billion), tax revenue (£3.8 billion), Universal Credit savings (£3.3 billion), homelessness reduction (£4.5 billion), and crime reduction (£3.1 billion) are based on research from Shelter and the National Housing Federation.
The £2.8 billion annual revenue figure is a calculation based on the 1.4 million consented homes and an average Council Tax of £2,000 per year.
The resulting 17,500 new social homes per year is a direct calculation using this revenue and the £160,000 average build cost for social housing.