Developers’ stranglehold on controlling housing supply must be broken if it’s accepted that building more homes is the best way to ease the UK’s affordability crisis.
That was the view of the Association of Mortgage Intermediaries, as published in its Quarterly Economic Bulleting this morning.
AMI estimated that developers are selling just 1.2 homes per site per week.
AMI said: “It has been brought to our attention that this slow sales rate is directly related to a conscious decision to control supply and therefore price.
“Builders are controlling supply to control pricing and values.
“If the argument that building more homes is the best way to ease the UK’s affordability crisis, then the developers’ stranglehold on the market must be broken.”
In June Sir Oliver Letwin published interim findings on the development market.
He concluded that it takes over 15 years to complete home building on some of the country’s biggest sites.
Meanwhile in London 270,000 residential planning permissions are un-built.
However Letwin said he had found no evidence of developers land-banking, which AMI took issue with.
AMI added: “If this is not landbanking, then perhaps the definition requires a rethink.
“As his earlier comments suggest, large builders are controlling the build-out rate of new homes.
“This, developers argue, is to maintain a commercially viable model.
“It also seems fair to insinuate that restricting the supply of new homes keeps a floor under pricing, which is of benefit to development companies.”