In five years, 1.5 million new homes – that’s the target the government has set itself. To achieve this they have a few ideas. One of these is the development of their newly-coined 'grey belt' land – land bordering our towns and cities that already has some form of development, such as car parks and the like. There's also been mention of building some new towns. But arguably, the most critical area being targeted by the government is unused brownfield land.
Brownfield is land that has already been built on but isn't currently used, including the empty shops and offices that blight our high streets all over the country. According to countryside charity CPRE, around 1.2m new homes could be built using redundant brownfield land. This is a surefire vote-winner as no greenfield land is touched, plus it will help bring our town centres back to life. Also, all the infrastructure is already in place. This represents the quickest route to hitting the target, plus we've got more unused brownfield land becoming available every year.
Reality
However, the planning system, which was last properly updated in 1947, is going to present some high hurdles to clear. With too few local planning officers working in a massively under-resourced system, it isn't easy to see how the government's bold high-level plans to unlock new homes will actually be approved at a local level. You can bet your own house on every green-belt landowner arguing that their own fair acres should be designated grey belt, but it will presumably be down to the local planning teams to decide each case on its own merits. Given they have insufficient resources to handle their current workload, I can't see how this will happen. And planning officers are highly skilled; training takes time.
New towns are also one of those ideas that sound great in principle but can prove trickier in practice. One key challenge surrounds affordable homes. The current planning approval process requires housebuilders to build a proportion of homes on their sites at cost. The government has indicated that it wants 50% of the homes in their new towns to be affordable. But if half of what a developer builds has zero profit, they'll need to increase their margin from the other 50%. This is unlikely to be viable which may mean that new town projects prove unattractive commercially to developers. The government will need to devise another way of tackling the problem. This could involve allowing a small (albeit restricted) profit on affordable homes or having a tiered system whereby more profit is permitted based on the percentage of affordable homes the developer creates on any given site.
Another new town challenge is that we don't have a recent poster child to shout about. Milton Keynes was built over 50 years ago, and our most recent effort, Northstowe in Cambridgeshire, began with a target of 10,000 homes, yet only 1,500 have been built. The town fell victim to the country's dire planning system, with too few local amenities being built to support the people moving in: no high street, pubs, or cafes. If the government is to convince people that new towns are the way forward, they'll need to learn from the failures of their predecessors and ensure that these communities will be of good quality. This means ensuring that amenities are available for early adopters and that the planning system is fit for purpose.
Opportunities
What about brownfield redevelopment? A challenge here is that this sort of project doesn't appeal to the scale housebuilders who typically create new buildings in large fields – they don't have the skills or appetite to repurpose existing buildings on smaller sites. This opportunity instead falls to smaller developers, often solo entrepreneurs and investors, and this is where the government needs to provide some support. We've had nearly a decade of the previous government targeting landlords and property investors to the point where the buy-to-let investment model barely stacks up. Yet these are precisely the people who could readily turn their hand to small-scale development projects – in fact, many already do refurbs, flips, and buy-to-let upgrades. It could be a great win-win for the government: help unlock potential new homes from brownfield land while at the same time encouraging entrepreneurship and wealth creation opportunities for individuals.
No matter where you lean politically, what's not to like about that?
ABOUT THE AUTHOR
Ritchie Clapson CEng MIStructE is a veteran property developer of 40+ years, an author, industry commentator, and co-founder of the leading property development training company propertyCEO. Ritchie is passionate about tackling the lack of housing in the UK and helping ordinary people to be part of the solution. To discover how you can get into property development, visit www.propertyceo.co.uk