Competition watchdog seeks views on use of landbanks and how planning rules affect competition

The Competition and Markets Authority (CMA) has published two 'working papers' seeking feedback on its assessment of the use of landbanks, and how planning rules concerning zoning, consultations and local plan processes may be impacting competition and how new homes are delivered.

On planning, the CMA has developed options that the UK, Scottish and Welsh governments may consider when reforming their planning systems, including whether a zoning or rules-based approach to development may help improve competition between housebuilders and boost housing delivery.

Another possible option the CMA suggests is requiring councils to only consult statutory stakeholders, rather than a wider group, as part of their assessment of planning applications. This would make better use of councils' time and resources, the CMA said.

Additionally, the CMA suggested having an effective housing target that "reflects the housing need of specific areas" and improving the ways governments ensure all councils have a proper local plan in place.

On land banks, the CMA's analysis has found that, although land equivalent to over a million plots is held in landbanks, in most local areas that land is held by several different builders.

The CMA is seeking feedback on its analysis, and in particular, whether local competition is being negatively impacted in the small number of areas where large amounts of developable land are controlled by a small number of housebuilders.

Those who wish to submit feedback to the CMA on these latest working papers have until 6 December 2023.

Dan Turnbull, Director of Markets at the CMA, said: "As we've progressed our work, we've heard concerns that the way large housebuilders use landbanks and complex planning rules may be harming competition and hold up the building of new homes.

"The market study is looking at all the options available which could increase the numbers of homes being built for the people who need them – this includes probing the issues around landbanks and planning rules further.

"We now want to get feedback on these working papers from the key people in the industry – be that council planning departments, builders or landowners – before we publish our findings early next year."

More information on the working papers and links to the papers themselves can be found here.

Adam Carey