Government’s new rules requiring disclosure of land agreements receive lukewarm reaction from HBF

The government will require developers to share information about certain rights over land from April next year.

The Ministry of Communities, Housing and Local Government (MHCLG) today confirmed it will press ahead with the new regulations which will govern contractual control agreements (CCAs).

Contractual control agreements (CCAs) are used by housebuilders to secure rights over land without purchasing the site outright and can reduce the financial risk of acquiring land before planning permission is secured or viability confirmed.

The government believes because CCAs are not disclosed, communities and other developers don’t have visibility over what land is available and therefore housebuilders can waste time and money assessing sites that are tied up. It said requiring this information to be disclosed would particularly help SMEs.

However a spokesperson for the Home Builders Federation said the number of SME housebuilders has plummeted following decades of extra policy constraints and taxes and reduction in local authority resources and questioned what impact the new requirements would have.

He added: “‘We welcome efforts to assist small builders, but it is difficult to see what practical effect this measure will have at a time when many firms are struggling to stay afloat.

“Meanwhile, ministers are still planning for a £340 million per year tax raid [the 10-year £3.4bn building safety levy] on new homes which will be implemented in the coming months.”

Neal Kelly, head of land and development at real estate adviser Bidwells, said the government “risks introducing a problem in search of a solution”.

He said: “A new public register could create extra red tape and unintended consequences, particularly for the SME builders the policy is supposed to support. If ministers truly want to help smaller developers deliver homes, bringing back Help to Buy would have a far more meaningful impact.”

Kate Macmillan, founder and director of consultant KMDC and former development director at St James Group and St William Homes, both part of the Berkeley Group, said: “This is yet another disincentive for developers at exactly the wrong moment. We’re in the grip of a housing crisis and measures like this risk becoming a costly distraction. There’s a real danger that the expense of maintaining such a register simply translates into an additional burden on development, functioning in practice as another property tax.”

Under the new regulations, housebuilders must provide information about who the who the right is between, what type of right has been granted (e.g. option, pre-emption), the land affected, when the right starts and ends and whether it can be extended. The rules will apply to registered freehold estates and registered leasehold estate with more than 15 years remaining.

Certain rights, such as those granted for loan secrurity and non-development rights are excluded from the new rules.

An MHCLG spokesperson said: “The reforms form part of the government’s wider efforts to diversify the housebuilding market and support SME developers, helping to build the 1.5 million homes the country needs.”