Draft Provision of Information (Contractual Control) (Registered Land) Regulations 2026
(1 day, 6 hours ago)
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The Minister for Housing and Planning (Matthew Pennycook)
I beg to move,
That the Committee has considered the draft Provision of Information (Contractual Control) (Registered Land) Regulations 2026.
It is a pleasure to serve with you in the Chair, Ms Vaz. The draft regulations were laid before the House on 9 March. Before I proceed further, I draw the Committee’s attention to a minor correction that has been made to the regulations. At regulation 4(3)(c)(i), the words “the right” were printed without a space between them. This was noticed after the statutory instrument had been laid, and was rectified by means of a correction slip. The correction is purely typographical and does not affect the meaning or operation of the regulations.
On the substance of the regulations, the Government’s considered view is that the land market in England and Wales has been too opaque for too long. Developers routinely use contractual control agreements—such as options, conditional contracts, pre-emption rights and promotion agreements—to secure rights over land without any requirement to disclose the details of those arrangements.
In the absence of any obligation to disclose the details of such arrangements, local planning authorities cannot see who controls development land in their area, smaller developers waste time and money pursuing sites already locked up, and communities have no visibility over the development trajectory of land around them. While some agreements may appear on His Majesty’s Land Registry title registers, where a notice or restriction has been entered, there is currently no reliable or comprehensive picture of who controls land, short of ownership, across England and Wales.
We think there is a compelling case for greater transparency. In their wisdom on this point—if not on many others—the previous Government agreed, and provided powers through the Levelling-up and Regeneration Act 2023 to address this issue. If Parliament approves them, the draft regulations will give effect to those powers.
With a view to implementing the powers in question, the previous Government consulted on proposals between January and March 2024, receiving responses from developers, lawyers, local authorities, land agents and members of the public. The final regulations we are considering today reflect that feedback and the consultation with the sector, and they include some changes to narrow their scope, which I will come on to detail.
The regulations create a duty on those who benefit from the agreement, such as developers and land promoters, to provide key information about the given rights to HM Land Registry, which will then publish it in a free-to-access geospatial database from April 2028. The regulations require the disclosure of four types of right: options, conditional contracts, pre-emption rights, and rights to direct or request that landowners enter into a transfer of lease, typically found in promotion agreements. They apply to registered land in England and Wales, and they set out exemptions to ensure that the requirements are targeted and proportionate.
Those who are granted a right must provide the required information within 60 days of a trigger event—that is, the creation, reassignment or amendment of a right. Submissions must be made digitally through a regulated conveyancer. Parties typically already hold the required information. Throughout the development of the regulations, we have considered the burden on the sector and minimised it wherever possible. HMLR may refuse to register a notice or restriction on the register of the title until the requirements have been met. Failure to comply is a criminal offence under section 225 of the 2023 Act.
I want to make it clear that the regulations do not require the disclosure of detailed commercial conditions, such as those relating to price or financial terms. The required information is limited to key information that advances our primary objective, which is transparency. The regulations also do not apply retrospectively. The previous Government consulted on a five-year retrospective window, but we have decided not to pursue that approach. That is a deliberate choice to minimise the burden on developers and land promoters, while still achieving meaningful transparency.
The regulations matter because transparency is essential for a truly competitive land market, and it is particularly important to certain players within the house building system. Committee members will know that small and medium-sized enterprise developers have seen their market share significantly shrink since the 1980s, when they delivered 40% of the country’s homes. SME house builders are essential to meeting the Government’s housing ambitions and supporting local economies, and we need to do more than just simply arrest their decline. We need to put in place the conditions that allow them to thrive.
The Government are acting to support SME house builders by increasing their access to land, providing further financial assistance and easing the burden of regulation, but we need to pull every lever we can. Helping them to identify genuinely available sites will remove another barrier that they face, and will therefore help to diversify the house building sector, so that more SMEs can get back on the pitch and help us to boost housing supply.
The regulations will also mean that local planning authorities will be able to see who controls development land in their area, and it will give communities greater visibility over the development trajectory of the land around them, enabling earlier and more collaborative conversations. On that basis, I hope the Committee will agree that these are sensible, proportionate and, I hope, straightforward regulations that it can support.
Gareth Bacon (Orpington) (Con)
I think it is the first time, Ms Vaz, that I have had the pleasure of serving with you in the Chair; I very much look forward to it. I welcome the opportunity to sit opposite the Minister again, and I appreciate the remarks he just made.
As the Minister said, in 2020 the previous Government began the process of looking into policies to provide a more transparent picture of the control of land through the creation of a freely accessible dataset. This came out of the Levelling-up and Regeneration Act 2023, which provided the framework for greater transparency on contractual control agreements in England and Wales such as—as the Minister also pointed out—option agreements used to control the land short of outright ownership.
The process began with a call for evidence, which was followed by an eight-week consultation in which respondents demonstrated broad support for the increased transparency of contractual arrangements, including for key stakeholders such as developers and local authorities. However, respondents also made it clear that they had some reservations regarding unintended consequences in respect of things such as commercial sensitivity and the potential burdens on small and medium-sized businesses. On that latter point, it is vital that the Government fully and meaningfully engage with small and medium-sized businesses in the sector ahead of implementation, to ensure that this statutory instrument leaves no one concerned about additional costs and red tape to a detrimental effect.
The previous Government hosted targeted engagement sessions before and during the consultation period to ensure that those who were going to be impacted by the regulations were fully aware and given adequate opportunity to put forward their thoughts and views on the matter.
Times are, however, a little different now, and there is an important context for this debate. Small and medium-sized businesses such as developers, land promoters and conveyancers face increasingly higher costs and difficult market conditions. Not the least of their concerns is this morning’s data release regarding the inflation rate, which showed an increase to 3.3% in the year to March and forecasts of a potential high in excess of 4% this year—double the rate the Government are aiming for.
For the construction and development industry, the impact on input costs, supply chains, material and, in particular, fuel could be severe. The data release shows that fuel inflation increased by 8.7% month on month—the highest rate since the beginning of Russia’s unjustified invasion of Ukraine.
Even before the data release, the Building Cost Information Service had forecast that building costs will increase by 14% over the next five years to 2031. That will hit SMEs especially hard and make it harder for them to compete as the major house builders dominate the more expensive land acquisitions, which data from the BCIS showed to happen in 2025. In addition to that are rising staffing costs, driven by increases to the minimum wage and employers’ national insurance contributions, and only compounded by the shortage of skilled workers available to the industry.
All that is alongside the regulatory and fiscal environment, which the industry tells us is stifling house building and development. Well-intentioned regulation is performing an important but far from perfect role in balancing the vital priorities of any Government to deliver a sustainable housing stock and ensure that homes are safe. That issue is much larger than the scope of this statutory instrument, but I know the Minister takes it very seriously and I look forward to further parliamentary time being spent on it.
Ultimately, I highlight all this because, for SMEs, this instrument produces new costs that are predicted to be about £4.2 million per annum. When that is added to the higher up-front capital costs, supply chain delays, increased taxation and the regulatory burden, it is vital that this important step to create better market transparency does not become overshadowed by the costs that come with it.
The instrument is right to promote a fairer and more open land market. Indeed, it is right that almost any market must be open to competition to allow SMEs to compete alongside major players. That is the foundation, of course, of any capitalist system, and I welcome regulation that provides more choice for consumers as well as fairness for small and medium-sized businesses. However, how does the Minister plan to ensure that that is exactly the impact of the regulations?
The regulations come with a real risk of unintended consequences. In particular, there are concerns about how the instrument will impact land values, landowners’ and developers’ behaviour, and community engagement. For landowners and developers, it is vital that the Government monitor the market to ensure that the regulations do not encourage the tying up of capital and shrinking of the land stock available for development by encouraging a wholesale shift to outright land purchases to avoid the regulatory requirements introduced by this instrument.
For landowners especially, the Government must work with the sector to ensure that the public visibility of agreements does not foster an environment in which less land is brought forward for development. Without tackling those issues, the Government may only exacerbate the situation we increasingly find ourselves in—a situation in which the land, especially brownfield land, is preponderant, but where the high costs of construction and development preclude the laying of bricks or concrete.
I finish with a simple but essential ask: will the Minister commit to a regular review of the potential trends and ensure that the regulations work as intended? Without that, efforts to build a transparent and competitive market, which are essential to the success of the housing market, could end up being lost in the shadow of prevailing economic downturn, be it global or national.
The previous Government pursued this policy in 2024 to increase competition and transparency, and the potential of the intended consequences is why the Opposition will not divide the Committee today. However, the Minister must ensure that the regulations help to get Britain building and do not hinder British building, and must work with the industry to see that they work as intended.
Matthew Pennycook
I thank the shadow Minister for his thoughtful remarks in scrutinising these important regulations. I stress again that the regulations have benefits for local planning authorities, for communities and, in particular, for SME developers.
We could have a long and extensive debate on strategic land banks and how the house building system works—although I am sure that the Committee does not want to go there. We very much contend that there are concerns about the use of contractual control agreements and what it does to stifle competition in the house building market. Promoting transparency and competition is at the heart of the objective of the regulations. The database will allow smaller developers in particular to identify genuinely available sites from the outset, rather than them discovering too later that a site is already tied up through an option or promotion agreement. As a result, the regulations will remove that wasted time and cost as a barrier to smaller builders entering the market.
As I mentioned in my opening remarks, in taking forward the regulations and looking at the feedback received in the consultation that the previous Government undertook, we have been at pains to minimise the burden on the sector wherever possible, and we were deliberate in ensuring that the regulations were proportionate when drawing them up. The Government’s assessment is that the overall impact on business will be de minimis. We do not expect any significant impact on the public sector either, as local authorities will benefit from having access to the data at no cost.
I will briefly mention HMLR, which I do not want to overlook. We do not think the contractual control database will add significant burdens. It is a new, separate digital service that does not add to HMLR’s existing registration workload. Contractual control information will be submitted through a dedicated channel and processed separately from title registration applications. HMLR recognised the cost of introducing contractual controls regulation, which will be funded through its financial framework, as part of the 2025 spending review that it agreed.
On commencement and implementation, the regulations come into force on 6 April 2027, and HMLR’s digital submission service will be available from that date. The transitional period gives grantees six months to report agreements that were entered into before commencement and allow time for the system to work through them. As I mentioned, we took the decision not to apply the regulations retrospectively to minimise the burden on the sector. As always, consultation with the sector is ongoing, but the previous Government engaged extensively with the sector through their consultation, and the drafting of the regulations reflects that feedback.
Notwithstanding the shadow Minister’s points, which I hope I have addressed, I draw the Committee back to what the regulations will achieve. They will enable developers to identify available land more quickly and effectively, and local authorities to see who controls the development of land in their area. As I have said, that will give communities greater visibility over the trajectory of land around them. I hope that, for the reasons around transparency and greater competition that I have emphasised, the Committee will approve the regulations.
Question put and agreed to.