How does the land supply system affect the business of UK speculative housebuilding? An evidence review

In this evidence review, we evaluate some of the key strategies of the speculative housebuilding sector, in relation to land, planning and development, drawing especially on 62 publications dating from 1997 to 2018.

We present existing evidence on four key areas of enquiry: land acquisition methods and processes; the composition of land portfolios and questions of land ‘banking’; product selection; and the speed of housing delivery. The evidence shows, for example, that:

  • Housebuilders commonly use options and conditional contracts to access and acquire land, and they utilise the planning process to target these on land likely to be released.
  • Housebuilders rely more on networks and contacts than markets, to acquire land for residential development.
  • Conventional land acquisition strategies and skills used for greenfield sites differ from those required for brownfield sites.
  • There are clear research and evidence gaps on land portfolios and land banking.
  • There is an embedded culture of standardisation which is resistant to significant public policy switches.
  • Most housebuilders still need to be convinced of the strength of the demand for greater customisation and energy efficiency homes.
  • The pace of development depends more on sales-rates than production-rates.
  • Greenfield sites appear to be built out quicker than brownfield ones.
  • The most common explanation for the pace housing development revolves around the concept of market ‘capacity’.
  • Alternative explanations include the reluctance of most housebuilders’ to innovate, adopt supply chain strategies and demonstrate supply chain awareness or move over at any scale to modern and offsite methods of construction.

We find much of the existing evidence is dated, tends to homogenise the industry, and is geographically benign. The review calls for a richer theoretical understanding of how the industry operates as a basis for stronger empirical investigation.

Authors: Dr Sarah Payne, Dr Bilge Serin, Dr Gareth James and Professor David Adams.

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Date: February 28, 2019 4:29 pm

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