COMMENT
Radical Moves. Strategies are changing says Dominic Agace, CEO, Winkworth.
T
he residential property dynamics in central London are once again experiencing change – brought about by economic pressures and
Government initiatives. The Coalition has recently taken a number of bold steps to address the condition of the property, planning and construction sectors and also to enable more affordable homes to enter the market. Prime Minister David Cameron announced a return to Thatcher’s widely- acclaimed ‘right-to-buy’ policy of the 1980s, making it cheaper for council tenants to buy their properties – and thus get on the property-owning ladder through bigger discounts – and so re-energise the lower end of the urban residential marketplaces across the capital and in the regions. Back in the 1980s, this policy was both effective and popular, with several million new families entering the owner- occupier market.
‘Build now, pay later’ initiative Housing Minister Grant Shapps’ October announcement of Government plans to release formerly-used public land with enough capacity to build up to 100,000 new homes by 2015 has been generally
38 DECEMBER 2011 PROPERTYdrum
welcomed. Government departments with significant landholdings have published, for the first time, strategies that set out how their formerly-used land and property which have the capacity to deliver more than 50,000 desperately needed new homes. For example, some 11,000 new housing starts will be achieved through the release of land owned by the Homes and Communities Agency. The amount of previously-developed land owned by the public sector is more than twice the size of Leicester, and its development could support as many as 200,000 construction – and related jobs in planning, design, security and home furnishing. However, the most radical of the
Government announcements is the ‘Build now, pay later’ scheme. This innovative model will undoubtedly help get
developers to start on-site sooner, and help provide the new infrastructure to brownfield of former government-owned sites as quickly as possible. Kick-starting redevelopment and new developments in this way for an industry struggling to get financial backing and investment for construction projects will prove catalytic in keeping heads above water. Winkworth notes that, at this point, the
developer costing a new build project will be as cost-competitive per square foot as refurbishment or conversion, and probably more so with the added advantage of VAT claw-back. That there is a shortage of housing stock
Grant Shapps plans to release enough public land to build 100,000 new homes.
across the UK is not in question. Nonetheless, the development system has been substantially interrupted by the absence of a consistent mortgage supply, and the dearth of adequate development capital – despite the presence of decent planning consent to develop the land into residential. In fact, in June this year, reports of builders/contractors on the verge of serious financial difficulties increased. Those that are having to fund a land-bank – or are spending cash seeking or enhancing planning permissions – are feeling just a tad warm under the collar.
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