Give housing developers 'shot in the arm' over council tax, ministers told

Housing developers should be given an "enormous shot in the arm" and charged council tax and business rates as soon as planning permission is granted, a Tory former minister has urged.

John Penrose told MPs that "the meter should start running" immediately after developers are granted permission in order to ramp up house building.

His comments came after shadow housing secretary John Healey described the Government's housing policy as a "bit like Groundhog Day" in that there had been "eight years of failure on all fronts".

Statistics from the National House Building Council (NHBC) revealed last month that the number of new houses registered to be built in the first three months of the year had fallen by 14% - the worst percentage fall in one three month period since 2012.

Mr Penrose, speaking in Commons debate on house building, said: "To get developers building faster, councils should be able to charge business rates and council taxes starting from the day that planning permission is granted rather than when developers finally get round to start building.

"We could give big developers a few months' grace till they get their crews on site but then the meter should start running so they would have a huge incentive to build and sell promptly rather than taking their time."

He added: "Equally and importantly the same forces would apply to the hedge funds that own derelict brownfield land in town and city centres too.

"These sites already have old, unused permission so the clock would start ticking immediately. Just think of the enormous shot in the arm, the jolt of adrenaline we'd give to urban regeneration projects everywhere right across the country if the owners couldn't sit on them for years any more waiting for something to turn up."

MP portraits
MP portraits

Speaking earlier in the debate, Mr Healey said it was "clear that Conservative ideology, not just Conservative policy, must change".

He said: "After eight years of failure on all fronts, how is the answer more of the same? When since 2010 on home ownership we've seen a million fewer under-45s now owning their own home and the lowest level of home ownership for 30 years.

"How can the answer be more of the same on homeless when it's risen every year since 2010 and we've now got 120,000 children growing up with no home. And how can the answer be more of the same when private renters have faced soaring rents, way ahead of income."

Mr Healey welcomed the Housing First pilots but warned the £28 million was a "small drop".

The housing market he said was broken and Government housing policy was failing to fix it. Ministers he said "talked big" about total house building targets but what new homes were built and who they were for was just as important as how many built.

He said: "Simply building more market-priced homes won't help many of those who face a cost of housing crisis because this can only influence prices in the very long term, so we have to build more affordable homes if we want to make homes more affordable."

Communities Secretary James Brokenshire said housing was the Government's "top domestic priority", he said: "It is totally unacceptable that we still have people out on our streets and we must turn this situation around," adding the pilot projects for Greater Manchester, Liverpool and West Midlands would be an important step.

He added: "Everyone deserves not just a roof over their heads but a safe, secure, affordable place to call home. It is the foundation on which everything is built, it is the Government's top domestic priority."