The financialisation of housing land supply in England

Abstract: https://journals.sagepub.com/doi/full/10.1177/0042098020907278#abstract

Planning policies intended to provide a 5-year supply of land for housebuilding in England have instead created a new industry in land speculation and introduced perverse incentives for developers not to build new homes.

My new article for Urban Studies journal is concerned with the impact of accountancy practices intended to introduce market disciplines to public services, like the town planning. These “market devices” shape the choices and influence the decisions of public sector planners but they also have a tendency to obstruct the policy goals they were intended to help implement.

In the case I discuss, the introduction of accountancy in the supply of housing land did not result in building more homes.  It encouraged public sector planners to increase the amount of land given planning permission and sanctioned them if they did not maintain a 5-year supply of permissioned land. This provided developers with an incentive to slow down housebuilding because by doing so they could to get access to more land. It created a market in land with planning permission that raised land values and launched a new industry in site promotion that sold permissioned land for profit.

In 2019 local planning authorities in England awarded planning permission for almost 400,000 homes but only 200,000 were actually built. The length of time taken to build houses has doubled, and the number of homes started by the speculative builders appears to have peaked. Most land with planning permission is not held by housebuilders but by site promoters and landowners who trade it for profit. Every year approximately 150,000 homes are given planning permission but never get built.

This paper makes a significant addition to our understanding of the impact of the marketisation of statutory planning systems in facilitating the financialization of landed property.  Its findings demonstrate the process through which urban development planning can be made into the supply-side of land speculation and direct attention to the role of financial instruments and accountancy practices in enabling land and real estate to be traded as assets rather than put to productive use in providing homes.

Read the accompanying article on Urban Studies OnlineFirst: https://journals.sagepub.com/doi/full/10.1177/0042098020907278