Newspaper article The Journal (Newcastle, England)

Commercial Property: The Land Banks Are Blown Open; Property Briefing

Newspaper article The Journal (Newcastle, England)

Commercial Property: The Land Banks Are Blown Open; Property Briefing

Article excerpt

Byline: Richard Freeman-Wallace

RECENTLY enforced planning regulations may end the practice of developers building significant reserves of undeveloped land.

The Office of Fair Trading (OFT) states that the four main supermarkets - Tesco, Asda, Sainsbury's and Wm Morrison - own more than 300 sites that have not yet been developed.

They also have forms of contract or options on another 149 sites that can be put into effect if planning permission is granted.

This is the same number as 10% of existing stores.

The supermarkets have owned most of these sites for more than four years and the OFT believes they may have been bought to stop competition opening in that area.

Separately, some developers have encouraged smaller investors to buy greenfield land in the hope that it would gain planning permission in the future.

Plots of farmland have been bought across the country with no guarantee of planning permission being granted at any time.

The practice appears to be a poor investment for would-be property developers.

Planning legislation that came into force this August, however, could defeat the practice of land banking by developers and retail chains.

On August 24 certain provisions of the Planning and Compulsory Purchase Act 2004 came into force that aim to speed the development application process.

The new provisions take away the ability to apply to extend the authority of an un-implemented planning permission.

Some developers have used this ability to "land bank", by obtaining planning permission that is not implemented, and then renewing the permission on the still unused site. …

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