Contribution
My Lords, I thank the Minister for introducing these regulations. As she will know, the origins of this policy lie with the previous Conservative Government and the work undertaken through the Levelling-up and Regeneration Act 2023 to improve transparency around contractual control agreements over land. We support greater transparency.
The Government argue that greater visibility of contractual control agreements may assist local authorities, communities and smaller developers in understanding how land is being assembled and brought forward for development. Although the principle is sensible, we also need to look at the practical implications of these regulations. Their success will depend ultimately on how they operate in practice and whether the Government properly monitor their wider effects on an already fragile housebuilding sector.
The context today is very different from when this policy was first developed. Developers, land promoters, conveyancers and, in particular, small and medium-sized enterprises are facing increasingly difficult market conditions. Inflationary pressures remain significant, input costs remain elevated, financing conditions are tighter and the costs of construction materials, labour and fuel continue to place pressure on viability across the sector—not to mention the increasing regulatory burden. At the same time, the Government continue to set ambitious housing targets while housebuilding output remains under strain. We have also seen growing financial pressures across parts of the industry, including on major housebuilders, as we read in the weekend’s business papers.
Against that backdrop, we must be cautious. Even relatively modest additional compliance burdens can have wider consequences than Ministers may anticipate. The challenge in many parts of the country is no longer simply identifying land, particularly brownfield land, but ensuring that development remains financially viable once construction, financing and regulatory costs are taken into account.
The Government estimate that the regulations will impose a cost on business of approximately £4.2 million per annum. In isolation, Ministers may regard that as manageable, but business does not experience regulation in isolation. These costs sit alongside increasing taxation, staffing pressures, financing costs and wider regulatory obligations. Can the Minister therefore explain what assessment has been made of the cumulative impact of regulatory and economic pressures on SMEs operating within the development sector?
I will also press the Minister on the risk of unintended consequences, which several stakeholders raised during consultation. There is a legitimate concern that the regulations could alter market behaviour in ways that are not intended. These are, after all, private contractual arrangements, and we should be cautious about imposing disclosure requirements unless the benefits clearly outweigh the additional burdens and commercial sensitivities involved. For example, encouraging a shift away from flexible contractual arrangements and towards outright land acquisition in order to avoid additional reporting requirements could have the effect of tying up larger amounts of capital and potentially reducing the stock of land being actively brought forward for development.
Similarly, there is a risk that some landowners may become more reluctant to enter into option or promotion agreements if the public disclosure of those arrangements creates commercial sensitivities or local controversies at an earlier stage. Can the Minister therefore commit to conducting a regular review of the market impact of these regulations? I would be grateful if she could also clarify how the Government intend to ensure that the new dataset is genuinely usable and accessible in practice, and at what de minimis level this applies. Will it apply to all land ownership and the structures around that, or is there a size of plot or de minimis at which it does not apply?
The Government’s objective of increasing visibility within the land market is understandable. At a time when housing remains challenging and viability pressures across the sector are growing, the Government must ensure that these regulations support development rather than inadvertently discourage it. The test of this policy will not be simply whether more information is collected but whether it helps get Britain building more homes without placing further strain on a sector already facing considerable economic pressure. I hope the Minister can provide reassurances on these points and look forward to her response.