Yahoo Finance House building red tape is holding back entire economy, warns Berkeley chief
The boss of London’s biggest housebuilder has warned that building red tape is holding back the entire economy.
Rob Perrins, chief executive at Berkeley Group, said planning rules, high taxes and onerous regulations were blocking investment in Britain.
Mr Perrins said: “Despite urban regeneration being a clear national priority, it has become increasingly difficult to progress this form of development as changes to planning, tax and regulatory regimes have created an increasingly uncertain, unpredictable and burdensome environment.
“This is driving investment away from urban areas, restricting growth and preventing homes and other tangible benefits being delivered.”
The Berkeley chief warned it would lead to “lower productivity, fewer jobs being created and net zero being harder to achieve”.
On current trends, as few as 100,000 homes a year will be built in Britain by 2026, Mr Perrins warned. That would be a third of the Government’s targeted level of 300,000 a year.
Mr Perrins has long called for an overhaul of planning rules to boost the housing sector. Berkeley Group specialises on building on brownfield land but has repeatedly said that obtaining planning permission for its sites is difficult.
The time taken to gain planning permission for new projects was now averaging almost four years, the company said, compared to two historically.
Over the last six months the group bought two new sites to build on but added that it “continues to experience significant delays in advancing its development proposals”.
Berkeley has paused land buying and Mr Perrins said the company had “no plans to invest in the future, not until planning and regulation is sorted out”.
Builders across the industry have complained about delays caused by red tape such as nutrient neutrality rules, which require builders to prove their developments won’t impact local ecosystems. The Home Builders Federation estimates the environmental rules have blocked at least 140,000 homes from being built.
Rishi Sunak’s attempts to scrap the rules were blocked by Labour.
Builders are also struggling with long delays at underfunded local councils, which must grant planning permission for new developments.
Housing Secretary Michael Gove last year announced proposals to remove local housing targets. Since his announcement around 60 local authorities have withdrawn or not produced local housing plans, further slowing down the delivery of homes.
Berkeley is London’s biggest housebuilder, completing around 19,600 homes in the last five years. Around 10pc of London’s new private and affordable housing is being delivered by the company.
Revenue was broadly flat in the six months to the end of October at £1.19bn.
Berkeley Group’s shares dipped by 1.9pc on Friday but have risen by 24.7pc year to date.
