UK housebuilding companies are sitting on (by various estimates) 400,000-600,000 plots of land which have planning permission, but they haven't built on. That's about 3 years' worth of new houses. The reason is to hold up prices, and because (with "ever-rising" prices) if they build in the future they will make more profit.
There are problems in the planning system, certainly, but at the moment we need an undeveloped land tax to stop this behaviour.
The government is not at all interested in fixing this, because it would probably crash the housing market. Which people (both politicians, many of the people who elect them, and perhaps most importantly all of the people who fund their campaigns) think would be a Very Bad Thing.
Seriously, it may be hard for young people to enter the housing market. But no-one wants to go for a solution that leaves the people who do own houses today with mortgages bigger than what their house is worth on the market. You don't help 10% of people by screwing over another 70%.
Not just this but also because they still need capital to finance the construction process. Borrowing short term is a model that works for them when demand is high - they don't want to be sat holding empty properties after all.
Longer term finance, allowing houses to be built for rental, is one solution that's slowly gaining traction with pension funds and the like.
Of course, as you say, the status quo suits the major housebuilders just fine so there is a lot of inertia when it comes to adopting new and innovative business models.
I really hope housing becomes a key electoral issue for the next government. The current housing crisis in the UK is impoverishing an entire generation.
The trouble is young people don't vote. Old people do vote, and they get free bus passes, TV licences, ridiculous pension protections and planning laws to protect their house price windfalls.
The trouble is that young people don't believe the major political parties will fulfil their promises even if they do vote for them (and they're probably right).
A relative of mine is building a house right now. They bought a property and they need to start construction within 1 year, or else they loose that property. Not sure if it works that way everywhere in Germany.
The UK has time limits on planning permission too, but they are quite long - 3 years is the default. Also the limits only apply to the commencement of the work. You can (and people do) get around this by digging a hole or laying a small part of the foundations, and then they do nothing else. So with really a very small amount of effort, you can "land bank" indefinitely. The government shows no signs of wishing to fix this, since forcing up the price of houses to absurd new highs is policy.
The link does not support your assertion that there is planning permission on those plots. After the hand-waving about profits, there are nearly identical quotes from developers explaining that the bottlenecks are planning permission, skilled workers and building materials.
"The vast majority of the 475,647 homes quoted by the LGA are either on sites where work has already started, or where there is not a fully ‘implementable’ permission and where it is not legal for builders to commence construction"
"To get to 475,000 unbuilt homes, the LGA have looked at every development scheme that has permission, and decided that, until the scheme is completed, the whole development should be classed as unimplemented – even if most of the houses are mid-construction, or even if they have been finished.
If you count houses that have been built as unbuilt, you are obviously going to end up seriously exaggerating from reality. I am writing this article from a flat that was finished 18 months ago; but another part of the development is still being built. According to these figures, I live in an unbuilt home."
Also, if they don't build homes fast enough, the national government steps in and overrules the local planning process, allowing the companies to build on other, more desirable greenfield sites that they ordinarily would never have gotten planning permission for.
There are problems in the planning system, certainly, but at the moment we need an undeveloped land tax to stop this behaviour.
Sources: http://www.theguardian.com/society/2015/dec/30/revealed-hous... http://www.local.gov.uk/media-releases/-/journal_content/56/...