Builders: CPO measures could pose a risk in a downturn

Plans outlined in the White Paper say the government will prepare guidelines “encouraging the use of [councils’] compulsory purchase order powers to support the build-out of stalled sites”.

It also plans to require house builders to publish information on build-out rates, and said previous performance could be a factor in gaining planning permission going forward.

David Sheridan, chief executive at Keepmoat Group, said: “Some land which has consent is simply not developable and if something is not being built there is a reason for it. There will always be the odd developer who will sit on a site but this is the exception, not the norm.”

Greg Hill, deputy managing director at house builder Hill, says that any CPO measures would also need to consider the implications of a downturn in the market. “Our model relies on building sites out quickly. However new CPO measures can be dangerous and the government needs to be careful to avoid unintended consequences. If there is a market downturn there are good reasons for house builders needing to slow down because there aren’t purchases at the other end.”

Mr Sheridan added: “I didn’t see anyone shouting about hoarding land in 2008. If there is a downturn and a council did want to auction land which hasn’t been built on, who would want to buy it?”

Graeme Lawes, director of the CPO team at Deloitte, said the powers may prove difficult to use in practice, as councils must provide evidence they can swiftly build out a site before successfully issuing an order.

Housing minister Gavin Barwell told Inside Housing the CPO powers were designed as a “last resort” for stalled sites. “All of the reasons people have come into this office and given me [for stalled developments], we have tried to do something about. Having done that we are then entitled to say we want to see a step change in building out schemes,” he said.