UK's Land Register Plan: A Misguided Fix for SME Builders

Planning minister Matthew Pennycook will unveil a new public register on Monday requiring landowners to declare options over development land, supposedly to help SME housebuilders avoid wasting resources on sites already tied up by larger developers. There's just one problem: the intended beneficiaries think the entire scheme is pointless. Industry leaders from property financiers to the Home Builders Federation are queuing up to dismiss both the premise and the timing of a policy that addresses a problem they claim simply doesn't exist.

Chris Gardner, chief executive of property financier Atelier, calls it "a solution to a problem that doesn't exist." Paul Rickard of SME housebuilder Pocket Living says he's never encountered any issues around land options. Steve Turner from the Home Builders Federation struggles to identify "what practical effect this measure will have at a time when many firms are struggling to stay afloat."

What's notable here isn't just the lukewarm reception. The beneficiaries of this policy are actively rejecting its central assumptions about how their industry operates.

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A crisis Labour can't afford to fumble

The timing could hardly be worse for this kind of misstep. Labour has committed to delivering 1.5 million homes by the next general election—roughly 300,000 annually. Hitting that target already looks precarious, according to figures across the sector.

These smaller firms aren't a nice-to-have in the housing equation. They're essential to reaching anything close to Labour's ambitions. The fact that the government's first major planning intervention is being rejected by the very people meant to benefit suggests either a fundamental misunderstanding of development economics or inadequate consultation before announcing policy.

The benefits to SMEs will not be as great as has been suggested. The government wants land transparency for its own purposes, but that comes with unintended consequences and ignores how planning works to enable supply.

Rico Wojtulewicz, director of policy at the National Federation of Builders, points out that the housing system already provides this transparency—councils assess site ownership and development likelihood when allocating plots. His conclusion is blunt: the government wants land transparency for its own purposes, but "that comes with unintended consequences and ignores how planning works to enable supply."

What those consequences might be depends on how the register functions in practice. Rickard warns it could become "a powerful tool for early NIMBY challenge," potentially undermining the government's broader planning reforms by giving objectors an earlier window to mobilise opposition.

The land banking myth refuses to die

Part of Pennycook's justification rests on tackling so-called land banking—the practice of large developers acquiring plots and holding them undeveloped. Ministers cite a 2023 Competition and Markets Authority report finding that major housebuilders control 658,000 plots, mainly through options that don't require outright purchase.

That figure sounds damning until you understand how land pipelines actually work in development cycles. Savills analysis of the same CMA data concluded that planning complications, not strategic hoarding, explained the holdings. Turner notes that "numerous independent enquiries have concluded that house builders do not land bank unnecessarily and that a supply of land is necessary to allow the industry to function."

Land banking makes for useful political theatre. The image of greedy developers sitting on vast tracts whilst housing shortages deepen plays well. But the evidence supporting it as a primary barrier to homebuilding has been repeatedly examined and dismissed by independent bodies.

The gap between political narrative and market reality matters because it leads to policies that address phantom problems whilst ignoring real constraints. SME builders aren't calling for a land options register. They're asking for planning system reform and relief from the Community Infrastructure Levy, according to Gardner.

Rushed implementation or hidden agenda?

The policy relies on Conservative legislation—the Levelling-up and Regeneration Act—to establish the register. That suggests either limited legislative bandwidth or rushed implementation without proper scrutiny. Using inherited statutory instruments is expedient but tends to produce poorly calibrated policy when the underlying assumptions haven't been stress-tested with affected parties.

The government hasn't provided evidence for Pennycook's claim that SMEs "often waste time and money" on sites already under contract. Industry figures directly contradict it. No mechanism has been explained for how a register translates into more homes actually built.

If this isn't really about helping SME builders, what is it about? One possibility is that Labour wants comprehensive land ownership data for future interventions—whether compulsory purchase reforms, land value capture schemes, or other measures the party has flirted with historically. Another is that the policy represents genuine confusion about development economics amongst ministerial advisers more familiar with political messaging about land banking than with how builders actually source sites.

Either explanation is concerning four months into a government that's staked significant political capital on delivering housing at scale. The Ministry of Housing, Communities and Local Government hasn't responded to requests for comment on industry criticism.

The test will come in implementation. If the register becomes another bureaucratic requirement that adds costs without delivering homes, Labour will have confirmed SME builders' worst suspicions about this administration's grasp of their sector. And those builders, facing their own survival crisis, will be watching closely whether this government prioritises symbolic gestures over practical support.

More articles by Ross Williams