Take 5: Build out or pay up and lose out
05 June 2025
The Government's new build out consultation contains some daunting proposals for the real estate industry: binding deadlines; more planning conditions; publicly-available commercial data; potentially hefty fines- and it all feeds into a new power for councils to refuse to decide the developer's future planning applications.
What's behind it all? Housing delivery of course. The "developer track record" concept has been around for a while and was added into The Levelling Up and Regeneration Act 2023. The Act contains the power for a local planning authority (LPA) to refuse to decide a planning application where the applicant has been "unreasonably slow" to build out another residential scheme in the LPA's area.
The Government is now looking to bring this power into effect and seeks views on the nitty-gritty practicalities. Buckle your seatbelt and read on for our top five takeaways:
1. New statutory framework
This would apply to new "eligible residential development" which means schemes of 50 or more new homes. The consultation seeks views on whether it should apply to other residential developments like Purpose Built Student Accommodation.
Developers of eligible schemes will have to:
submit a build out statement with the planning application (including outline applications and Section 73s). This will need to include tenure mix, expected delivery dates, and any foreseen issues with build out;
notify the LPA before development is commenced through a commencement notice (which should also include the expected completion date); and
report annually to the LPA on housing delivery through a development progress report.
Anyone who is tempted to be overly conservative with predicted delivery dates should be mindful of the new National Development Management Policies (NDMPs) due out later this year. The NDMPs are expected to identify delivery times as an important material consideration in the determination of the planning application.
2. Binding by condition
It is highly likely that LPAs will impose a pre-commencement condition requiring any changes to the build out statement to be approved by the LPA in advance, meaning you won't be able to start work until any changes are signed off.
In addition, the Government is proposing that a mandatory condition be attached to all relevant permissions, requiring a progress report to be submitted every year.
3. Delayed Homes Penalty
This is a big one. The developer or landowner could be fined (potentially as a percentage of sales price) for each home behind schedule. Described as a "last resort", the charge would be applied if the developer falls "materially behind" pre-agreed completion deadlines.
What does "materially behind" mean? It isn't set in stone yet, but the working paper suggests that just 10% behind could be the trigger. There is a potential 'get out' if the delay is due to nationally defined external factors, such as severe weather. Can of worms officially opened...
4. Developer track record
The law will require the build out information to be submitted using specified templates underpinned by data standards. It will be used to compile developer track records and be included in the planning register and so will be publicly available.
5. Unreasonably slow
If an LPA believes that a developer has been "unreasonably slow" in carrying out development in its area, the LPA can refuse to determine a later planning application.
A connected person is also caught, so subsequent landowners and other corporate entities under the same development group as the blacklisted developer could be tarred with the same brush.
6. When is this happening?
The Government is pushing this at pace and wants the new system to come into force next year. It's clear from Kier Starmer's X account that he sees this as a vital part of the reforms to unlock new homes.
Is he right though? Is this the answer? The measures mooted in the consultation are certainly not developer-friendly and could have a detrimental effect on housebuilder incentivisation, external funding and wider investment. A lot of the detail is still missing and many of us wonder how this will actually play out in practice. Now is the time to speak up and be heard. There is still plenty of time to respond to the consultation which closes on 7 July 2025.
