Developers told: build some homes or get off the land

Developers are sitting on construction sites with planning permission for over 4,000 homes in the North East which they are refusing to build.

Ed Miliband
Ed Miliband

Developers are sitting on construction sites with planning permission for over 4,000 homes in the North East which they are refusing to build.

The scandal of developers hoarding land will be highlighted today by Labour leader Ed Miliband, as he issues a blunt “use it or lose it” warning.

The sites have all been given planning permission for the construction of housing.

But they are sitting empty while developers wait for the property market to pick up and the value of their investment to increase.

Among the sites where planning permission has been granted but not acted upon are the Sanderson Hospital in Gosforth, Newcastle, and a plot near Newcastle’s quayside where there has been approval for more than 500 new flats.

Elsewhere, schemes have been given the go-ahead to build 40 apartments on Waterville Road, in North Shields, and 14 housing units on land at a former filling station, on Coast Road, in Wallsend. In both cases work has not yet started.

The problem was exposed in a report by the Local Government Association, the official body which represents councils.

In a major speech at Labour’s National Policy Forum in Birmingham today, Mr Miliband will warn that developers who choose to hoard sites are contributing to a housing shortage.

And he will argue that they should start building or make way for firms that will, in order to provide an immediate boost to the economy.

Mr Miliband will announce that Labour is looking at a range of options if it wins the next election including giving local authorities powers to charge developers fees for sitting on land with planning permission without a good reason or, as a last resort, issuing a compulsory purchase order.

Figures compiled by the Local Government Association show that planning permission has been given for 4,185 housing units in the five Tyne and Wear authorities, Durham and Northumberland.

Both Newcastle and County Durham have given approval for over 1,000 units each.

Mr Miliband will say: “There is nothing more important in family life than having a home. Nobody should be in any doubt about this Labour Party’s determination to rebuild this country, get our construction industry working again and give families a decent chance of owning a decent home for their children just like their parents did before them.

“But to do that we have to be willing to confront some of the obstacles to house building. Across our country, there are firms sitting on land, waiting for it to accumulate in value and not building on it. Landowners with planning permission, who simply will not build.

“We have to change that. That’s why as part of our Policy Review we will consult in the coming months on how to get that building started. All options should be on the table, including giving local authorities real power to say to the worst offenders that they should either use the land, or lose the land.

“Permission to build should mean landowners build. If there is unnecessary hoarding, developers should be encouraged to do what they are in business to do: build houses.”

Mr Miliband will highlight new figures published this week by Shelter showing young people who work hard are locked out of buying new homes for up to 30 years because of sky-high property prices.

The number of homes built by the private sector fell by 5% in the last 12 months to 84,750.

In the latest quarter, only 18,380 homes were completed by the private sector – the lowest quarter in 23 years.

He will say: “For decades now, Britain simply hasn’t built enough homes. Generation after generation knew we had to, but it never happened. And the result has been that the prices of houses and flats have gone up and up, even in these difficult economic times.”

Housing minister Mark Prisk said: “The evidence shows that affordability has improved under this Government, with housing at its most affordable since 2003 and the highest number of first-time buyers since 2007.

“We are building 170,000 new affordable homes across England, and have introduced a package of measures to help people move on to and up the housing ladder.”

There are firms sitting on land, waiting for it to accumulate in value and not building on it

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