Hailsham Based Planning Consultant and House Designer Calls for Planning Reform
Added: (Wed Dec 06 2017)
Pressbox (Press Release) -
Following Chancellor of the Exchequer Philip Hammond’s Budget last week, Glenn Moore, of Hailsham-based GM Moore & Associates, says it is time for the UK to recognise its planning regulations are no longer fit for purpose.
During his speech, Philip Hammond acknowledged that the UK has a housing problem – pledging to build 300,000 new homes by 2020 and altering Stamp Duty to help first-time buyers. The Chancellor also admitted that solving the housing crisis would, “take more than money, it will take planning reforms”, although there was little detail about how these reforms would be undertaken.
According to Glenn, the Government needs to recognise there is a fundamental problem at the heart of UK planning regulations – the value of land.
Says Glenn, “Problems in the UK housing market do not start and end with house prices. Altering Stamp Duty will not help build more houses and could push up house prices. The problem the UK has is that the price of land with planning consent is now so astronomically high, it is often financially impossible for developers to build houses and make a profit.”
Citing an example from his own bespoke property designs, Glenn explains how he designed and gained planning approval for two custom-designed houses built on the site of an old disused barn. The construction costs for both homes is about £750,000, with the per plot land valued at £350,000 each. In total, construction and land purchase for each dwelling is around £1.1 million but the resale value is circa only £750,000. Developing this disused land would therefore be financially impossible if the land was not already owned by the developer, as in this instance. Businesses cannot be expected to build the houses the country demands and lose money on each building.
Glenn says part of the blame must go to the 1961 Land Compensation Act which set in motion a train of events that has meant a hectare of land with planning permission is now worth 100 times the value of agricultural land. Landowners are being rewarded handsomely for just getting planning consent. At the same time, they are also financially benefiting from infrastructure improvements paid for out of the public purse. For example, it is estimated projects such as Crossrail 2 and the Bakerloo Tune line extension will cost us £36bn but nearby landowners will pocket £87bn in increased land values. Especially in the South East of England, where unoccupied land is so scarce and demand so high, it is time to rethink out approach to land values at a governmental level and this means planning reform.
Building in the South-east, and not ending up in negative equity, is possible but it requires the land to be purchased without the ridiculous added-value of planning consent. Recalling an environmentally sustainable house built into a disused reservoir, Glenn notes how, when the land value is low – in this case just £60,000 – the cost of construction and the eventual value of the property make sense. Sites like this are, unfortunately, like hen’s teeth in the South East of England so this isn’t a model that is going to solve the UK’s housing problem. As it is, Glenn says he spends a significant portion of his working life helping developers removing parts of the affordable housing requirements from projects to make them economically viable. Without change, house prices must continue to rise to cover land purchase and construction costs, and that isn’t good for the country.
Just late last year a two up two down ex farmworkers cottage in ¾ acre within 5 miles of Lewes sold for £680k, purchased on a sealed bid basis for offers in excess of £450k. Cost to modify to a 3 - 4 bed property will be in excess of £300 with an end value of £750k - £800K.
Concluding, Glenn notes, “This has a long-term socio-economic effect on the region. Higher houses prices mean only wealthier buyers, often exiting London, can afford to buy in our rural areas. If this happens, where do our teachers, gardeners, tradesmen, shop assistants live? There isn’t sufficient public transport for them to travel to work, so either our rural communities die and become commuter settlements for people working in London, or our roads are clogged with cars trying to ferry people to work.
“The NPPF already enshrines the principles that should forge a way forward. In paragraph 7, it talks about needing a planning policy that has an environmental, economic and social component, and paragraph 17 directs planners to ‘proactively drive and support sustainable economic development’. This means homes, businesses and infrastructure but the land is not being allocated. Officials in Whitehall and on a local level are not preparing realistic “Strategic Housing Land Availability Assessments” about the economic viability of land, as required in paragraph 159. We have reached a point where planning development may actually stall, something specifically warned against in paragraph 205”
“The framework exists to rework our planning procedures to benefit everyone. It’s time we took a long hard look at our planning system to see how we can reduce costs without reducing quality. To me that means changing the way planning consent exponentially benefits landowners who do nothing.”
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