Housebuilders should be required to sign delivery contracts when they are granted planning permission to ensure that homes are completed within a set timescale and that valuable land is not left empty, a think tank has argued.

A report by the Centre for Policy Studies, released today, argues that planning permission should not be a “one-way gift” and that developers should be held to their side of the bargain.

Currently, receiving planning permission boosts the value of land without creating an obligation to build, which causes a bottleneck.

The report argues that this concentrates the supply of land in the hands of the large housebuilders.

The six biggest developers currently have around a million plots in their land banks, which the report says is nearly the equivalent of the land required to meet government housebuilding targets across England over the next five years.

Meanwhile, it points out that the top 10 house builders currently build 40 per cent of all new homes, with the top six controlling around 33 per cent of the market. 

It claims that smaller developers face being squeezed out as they have gone from building around 40 per cent of homes in the 1980s to around 10 per cent now.

Housing supply in England has fallen every decade since the 1960s and previous reforms have increased the number of permissions granted without improving the rate of delivery.

The think tank says 2010 planning reforms led to permissions rising to over 350,000, but the number of new homes actually built was just over 200,000.

The report, which discloses that it was “supported by” the developer Regal Homes, says that small and medium-sized (SME) housebuilders need to play a much bigger role in delivery.

It argues that SME builders should get priority when public sector land is sold for development.

It calls for a housing delivery test so that councils have to ensure delivery of sufficient homes instead of focussing on planning permissions granted.

The CPS says councils should be penalised if they do not deliver enough homes for their communities.

It says that housing minister Chris Pincher has voiced support for the report.

The report’s author CPS head of policy Alex Morton says: “The government’s planning reforms are very welcome. 

“But we need to focus on delivery and learn from previous attempts to fix England’s housing supply problems.

“The reforms we are proposing would help create a new, better planning system that focuses on ensuring delivery, working alongside the other proposals government is bringing forward.

“We have a once-in-a-generation opportunity to fix these issues, and with a Planning Bill under way, now is the time for action.”

Regal London chief executive Jonathan Seal adds: “We welcome today’s report from the CPS and supportive comments from the minister. 

“Both make clear the important role that SMEs have to play in shaping the debate about housebuilding and planning reform.”