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Developers will be required to declare options over land under government plans for a public register aimed at increasing transparency within housebuilding in England and Wales.
Legal requirements will be imposed on developers to disclose all agreements that give them rights over land, in rules designed to deter anti-competitive behaviour such as “land banking” and help smaller housebuilders.
Matthew Pennycook, the planning minister, wants to see more projects led by small and medium-sized developers in pursuit of Labour’s promise to build 1.5mn homes, widely seen as being behind schedule.
He argues that SMEs waste time and money assessing potential sites that are already under contract to big developers and wants to bring more transparency to the system.
The issue has long been on Labour’s radar and the party called for a public register when in opposition, while Conservatives also considered creating one before the 2024 election.
However, the plans have sparked accusations of adding to red tape at a time when developers say many housebuilding projects are increasingly unviable.
On Monday Pennycook will set out regulations using powers in the Conservatives’ Levelling-up and Regeneration Act, requiring public disclosure of all “contractual control agreements” over land.
Alongside the public Land Registry of ownership in England and Wales, ministers aim to set up a public database of who controls development rights.
They point to a 2023 study by the Competition and Markets Authority which found that big housebuilders control 658,000 plots, mainly through options and similar deals that do not require them to buy land outright.
However, the CMA also found that land banking by big developers, a key criticism for some Labour MPs, was not distorting the housing market and was largely a symptom of problems in the planning system.
Pennycook told the FT earlier this year that he wanted to reshape Britain’s housing industry, which he said had “become overly reliant on a speculative model of development” that held back building.
“The land market lacks transparency, and that makes it very difficult for new entrants to come in. Over time that has reduced competition,” he said. “We really need SMEs back on the pitch in a big way. In the 1980s they accounted for almost 40 per cent of housing supply — today they’re below 10 per cent.”
However, Neil Kelly, head of land and development at property consultancy Bidwells, said: “Transparency in the land market is hard to argue against, but the government risks introducing a problem in search of a solution. A new public register could create extra red tape and unintended consequences, particularly for the SME builders the policy is supposed to support.”
Kate Macmillan, founding director of development management consultancy KMDC, cautioned that the expense of maintaining the register might end up “functioning in practice as another property tax”.
Paul Rickard, chief executive of Pocket Living, a London-based housebuilder, said that as an SME developer, “this hasn’t been an issue for us when looking to purchase land or enter into option agreements”.
He called on the government to instead improve the existing Land Registry, which he said was causing delays and frustration, and make available support for first-time buyers to spur the market.
Marnix Elsenaar, head of planning and infrastructure consenting at law firm Addleshaw Goddard, said: “On the upside, the new rules would improve transparency about who controls land and which sites are genuinely available for development, which could, in theory, help more SME developers enter the market. However, developers may not appreciate their commercial agreements being made public.”
But he added that land contracts were not the “main blockers to development”, highlighting concerns such as the rising cost of building materials, energy and labour, and high interest rates.