According to the Local Government Association, the total number of plots of land with residential planning permission is 400,000.
The land bankers (i.e. the large house building companies) bleat that they need to have a couple of years' supply in hand because it is so difficult to get planning permission. At current rates of 100,000 new homes per year that's enough for four years and I do wonder whether they also buy up four years' worth of bricks, timber and pipes.
But in their accounts they tell a different story, from Taylor Woodrow (link below) page 7:
Our landbank is an investment portfolio which is critical to our success and underpins the future performance of our business. We have continued to enhance the quality of our short term landbank by actively managing our portfolio: taking advantage of the attractive opportunities we are currently seeing at this point in the cycle and continuously adding value to our existing landbank.
But land with planning is only part of it. Let's take the top five house builders from here and look at how much land they own on which they hope to get planning permission aka "strategic land".
They publish the following figures in their annual accounts with varying degrees of fine detail:
Barratts
18,536 plots with planning, value £1,047m
11,400 acres strategic land = 59,800 plots, value £1,080m
Sales 13,663
Taylor Wimpey
65,409 plots with planning
Strategic land = 100,340 plots
Total value £2,051m
Sales 10,886
Persimmon
Landbank 68,200 plots, which they say is "6.9 years of output at current levels of supply"
Total value £1,496m
Sales 9,903
Berkeley
25,685 plots with planning, value £861m.
Strategic land = 10,000 plots, value £310m
Sales 3,712
Bellway
17,636 plots with detailed planning,
13,500 plots "in the pipeline" i.e. will get planning very soon.
Long term land holdings 2,800 acres
Total value £853m
Sales 5,226
That means that these five builders have got enough land for 400,000 homes and the total cost/value of that is £7,000 million.
In their last accounts year, they sold 43,390 homes, so overall, that looks like nine years' worth of land to me.
So yes, they are land banking and they make no secret about it in their accounts.
