Government reveals new transparency rules to improve fairness in land market 

This can particularly impact smaller house builders, who can end up wasting money, time and resources assessing sites that are already tied up.

The Competition and Markets Authority’s 2023 Housebuilding Market Study estimated that the UK’s largest house builders control around 658,000 long-term strategic plots, predominantly through these arrangements.

This is not the first intervention the government has looked to make into the land market.

Last year, the Housing, Communities and Local Government Committee launched an inquiry into land value capture.

This is a way for local authorities to raise revenue by charging fees and taxes on land that has increased in value. This can then be used to fund public services, such as transportation.

You can read Inside Housing’s analysis of how increases in land value could be captured here.

Under the new CCA rules, developers will be required to disclose what land is controlled, where it is located, how long the agreement lasts and who the parties are.

This information will be recorded in a new public database through HM Land Registry. 

For housing, the government hopes the move will help developers avoid pursuing land that is already tied up in agreements, support smaller builders to compete for genuinely available sites and improve transparency for local authorities and communities.

At the same time, it could encourage more sites in the pipeline to come forward for development.

However, Neil Kelly, head of land and development at real estate advisor Bidwells, said: “Transparency in the land market is hard to argue against, but the government risks introducing a problem in search of a solution.

“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 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.

“The more fundamental point is that if you’re serious about acquiring a piece of land, you should be in direct correspondence with the landowner anyway, not relying on a public register to do that groundwork for you.

“There’s also a community impact that shouldn’t be ignored. Putting option agreements and heads of terms into the public domain before any pre-application engagement has taken place risks raising expectations or fears in local communities long before there’s any real clarity about what a site can actually deliver.

“And for SMEs in particular, pre-emptions and options are genuinely valuable tools. They allow smaller developers to de-risk a scheme and manage cashflow in a way that makes marginal sites viable.

“Anything that undermines confidence in those mechanisms will hit the smaller end of the market hardest.”