Development companies buy as much land as they can, as cheaply as they can, especially from retiring farmers. Average developer profits in 2018 and 2019 have been staggeringly high. Dividends have been paid to shareholders, directors have raked in massive bonuses, while house quality has decreased and no effort has been made to build sustainably or use renewable technology. The developers can afford to hang on to the land (land banking) until the time is right to apply to build another housing estate.
This graphic (click here for source) shows revenue, profit, homes built April 19 - April 2020, average prices and the number of plots in each developer's landbank - 4 developers have over 50,000 plots each. (200,000 potential houses.) Altogether they have approx 500,000 plots landbanked.
2019 Key financials Barratt Homes: UK's largest housebuilder, revenue £4.7 billion, profit of £909 million in 2019, 17,856 homes completed. (David Wilson Homes are part of Barratt Homes.) Berkeley: Revenue £931 million, profit £276.7 million, 3,698 houses completed - average house price of £664,000. Bellway:Revenue £3.2 billion, profit £662.6 on sales of 10,892 homes Bloor:Revenue £1.7 billion, profit £192 million on sales of 3,760 homes Bovis Homes (now Vistry): Revenue £1.13 billion, proft £188.2 million on sales of 3,867 homes (over £47,000 per house completed and sold.) Crest Nicholson:Revenue £1.08 billion, profit £201.9 million on sales of 2.912 homes Linden: Revenue £820 million, profit £104 million, on sales of 3,229 homes Miller:Revenue £841 million, profit £122.1 million, on sales of 3,498 homes Persimmon:2nd largest UK housebuilder, profit £1.09 billion on sales of 15,855 homes (over £66,000 per house completed and sold.) Redrow: Revenue £2.1 billion, profit £406 million on sales of 6,443 homes Taylor Wimpey:3rd largest UK housebuilder, revenue £4.34 Billion, profit £880.2 million on sales of 15,275 homes