Britain's biggest housebuilders increased the volume of their land banking plots by 4% during the pandemic, with the total amount of plots now believed to be 441,702, according to new research by Birmingham and Newcastle-based property developer, StripeHomes.
The current level of land bank plots by these housebuilders alone far exceeds the government’s target to build 300,000 new homes a year, a target they consistently fail to reach.
Landbank plots are pieces of land that a developer owns but chooses not to build on, a practice that has been widely criticised with the nation in the grip of a housing crisis.
It’s largely believed that the motivation for land banking is to avoid diluting the housing market with stock which could cause the value of property to decrease. Instead, the approach of drip-feeding the market and limiting annual supply keeps prices at a premium.
Barratt, one of the nation’s biggest housebuilders, also claims the title of Britain’s biggest land banker. As of 2020, Barratt owned 80,324 land bank plots. Second on the list is Taylor Wimpey, owner of 77,000 land bank plots, and third is Persimmon with 67,205 plots.
In 2019, however, Persimmon owned 71,942 land bank plots, which means their total fell by -7% between 2019 and 2020.
But while Persimmon chose to shed some of their bank plots, they are one of only two developers to do so, with the second being Redrow who reduced their land banks plots by -5% between 2019 and 2020.
All of the other big contenders have maintained or increased the amount of land they’re hoarding.
No developer has made a greater effort to increase their land back stock than the Vistry Group. In 2019, Vistry owned 18,358 bank plots. By 2020, they owned 34,053, an increase of 85%. In the same timeframe, Countryside increased their bank stock by 8%, Berkeley increased theirs by 6%, Bellway by 4%, and Taylor Wimpey by 1%.
James Forrester, Managing Director of StripeHomes, commented: “The process of developing and delivering homes to market is a lengthy one and so any developer is likely to be sitting on a certain degree of land at any one time.
"However, it’s fair to say that the practice of land banking has been abused across the UK with many big developers drip-feeding the market in order to maintain a positive trend line where their profits are concerned.
"A decision based on nothing more than self-interest and greed and arguably no different to hard-nosed eBay sellers hoarding hand sanitiser and PPE during the pandemic and selling it on at an extortionate rate.
"It’s time we readdress the balance and take the power away from these sector goliaths. There’s a wealth of smaller enterprises delivering developments across the UK with a focus on social impact and community benefit. Of course, we don’t expect any business to operate at a loss, however, it’s time that the UK homebuyer stops paying the price for corporate greed.”