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    AM PRESS RELEASE

    Aston Mead welcomes move to ban councils from gambling on the property market

    370 230 Aston Mead Land and Planning | Land with development potential across Surrey

    Adam HesseLeading land agents Aston Mead have welcomed proposals to ban local authorities from making risky investments in commercial property and say councils should spend the money on affordable housing instead.

    The move follows revelations that since 2016 local authorities have borrowed £6.6bn to buy shopping centres and office blocks, to replace revenue lost by government cuts – 14 times more than in the previous three years. Over a third of that spend was made outside their boroughs. Last month it was reported that the Treasury now intends to “severely restrict councils’ ability to borrow for the sorts of out-of-area investments which are for yield rather than for policy reasons”.

    Aston Mead Land & Planning Director Adam Hesse said: “We’ve been warning councils about their wild property gambling spree in a series of press releases, articles and interviews for the past two years.

    “For instance, we know of one local authority which bought a shopping centre for an eye-watering £40m just weeks before the lockdown came into effect. Not surprisingly, more than 90% of its stores are now shut. And there’s another which paid £6.2m for a hotel that the tenant has said will go bust without a rent cut of up to 80%.

    “Let’s face it – the authorities concerned are hardly experts in property speculation. And yet they are risking vast amounts of taxpayer-funded debt on commercial premises, often outside their districts, and about which they know next to nothing. These councils are massively over-exposed and putting public services in jeopardy. I’d be astonished if they got half of their money back or half of their rents paid!”

    The British Property Federation says that only one third of retail rents and two thirds of office rents were paid on time in March of this year. It expects those figures to halve again this month. Meanwhile, Property groups are finding it difficult to sell retail parks even at rock bottom prices, and analysts forecast lower office rents for years to come, as more people chose to work from home.

    However, it has since been suggested that the proposed ban may contain a major loophole because whilst the plans will force councils to hire a qualified independent accountant, it appears that they may not have to follow the advice provided.

    Adam Hesse said: “This is absurd. For this ban to work, it should be mandatory to follow the guidance given. No exceptions, no exemptions, no excuses.

    “In fact, we would propose that councils go even further. Local authorities have been funding their property speculation by borrowing from the Public Works Loan Board at incredibly low rates.

    “No one begrudges councils being able to access money cheaply, of course. But we think that this cash should be used to build affordable homes on council-owned land instead.

    “Local authorities are some of the largest landowners in the UK. As one of the South East’s most proactive land agents sourcing sites for our developer clients, we are amazed at how much council development land there is in our town and village centres, and yet they’re doing nothing with it!

    “We suggest that councils could continue to invest in property by selecting their own sites on which to build, provide the planning permission required, and decide how many properties should be constructed – all in their own local regions – the circumstances and needs of which they intimately know and understand.

    “The homes would enhance the value of the land, as well as provide a regular rental income for the council. The level of risk the authority would be exposed to would immediately diminish, and it would mean that we could start to construct the affordable homes that people in this country so desperately require.

    “Perhaps the Government should issue Compulsory Development Orders on local authority land where there is an acute shortage of affordable homes to offer those on the waiting lists.

    “It’s estimated that this country needs to build 100,000 genuinely affordable homes over the next five years – many of them for key workers. Our proposal would be the perfect way to thank them for their sterling efforts through the Coronavirus crisis.”

    It’s “business as usual” during lockdown, say land agents

    527 328 Aston Mead Land and Planning | Land with development potential across Surrey

    Richard WatkinsLeading land agents Aston Mead say that their sector is continuing to operate in a way which has been relatively untouched by the coronavirus pandemic.

    Unlike estate agency, which has reportedly seen a drop of around 90% in the level of property sales for the time of year, Director Richard Watkins says that land deals are taking place much as they were before the crisis.

    He explains: “We certainly haven’t stopped working during lockdown. Deals are still being agreed and exchanged and clients are still calling us for development opportunities. We’re hearing from developers who still want to buy sites and see no reason not to proceed. So far, it has been as close to business as usual as we could have hoped for.

    “We have a number of estate agency partners who pass us land opportunities – and very few of them have had deals fall through on back of the pandemic. All of them are in regular touch with their sellers and buyers, and they report that the majority of them want to continue to sell and buy, just as soon as the lockdown allows.”

    Richard Watkins says that whilst some developers have been a little wary about buying sites with planning permission in place because they are less certain about the immediate future, those buying sites on which they are hoping to get planning are still going ahead and are hungry for more.

    He says: “Recently, we’ve had three deals involving SME developers – in Haywards Heath, Maidenhead and Oxted – all of which were agreed at the end of last year or the beginning of this one. They have all exchanged, without fail, in the last couple of weeks. If people were expecting such developers to sit on their hands and do nothing during lockdown, that’s certainly not the case!

    “Their thinking is that it’s going to take 6 to 12 months to get planning permission and another 12 months to build – so they are at least 18 months to 2 years away from having something on the market to sell. That’s a long time – and they are expecting normal life to have returned by then.

    “In fact, we’ve only lost one sale due to lack of funding. It was an unconditional purchase of a site in Berkshire, because the bank pulled the plug due to the higher than normal risk factor of that site. So it’s possible that there will be a drag on business for the next six months or so, as people get used to the new normal. But we see this as a more of a temporary blip, rather than a long curve down the spiral.”

    Richard also says that he nature of the business they carry out and advances in technology have combined to leave them well placed to deal with the current crisis.

    He explains: “Social distancing is easy for us because we tend to operate using online development software – certainly in the first stages of a land transaction. Some sellers are unlocking their site and leave prospective buyers to take a look around entirely by themselves. And we’re currently close to agreeing a deal which has so far been carried out entirely via Zoom; we’ve not met the landowner nor buyer face to face, and haven’t yet needed to visit the site at all!

    “The truth is that before the virus struck, the UK was building 200,000 homes a year. The target was 300,000 – but even if we only return to the 200,000 figure in the future, we’ve still got to deliver those homes.

    “For many investors, this situation will present itself as a very good buying opportunity. Some people will dither; some will sit on the side-lines. But we’re very good at adapting in this country.

    “As a team we have adopted a positive attitude throughout – which has certainly helped – and have been careful not to talk ourselves into a worse market on the back of the often gloomy predictions out there. And as the rental market is showing a massive pent up demand from tenants, I’m convinced that the property market will find a way through this. Meanwhile, in land agency, we’ll keep working as we always have done.”

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    An update from Aston Mead Land & Planning

    527 328 Aston Mead Land and Planning | Land with development potential across Surrey

    We are experiencing what is unquestionably the most difficult time for British companies in a generation – not only in the property industry, but elsewhere as well – all trying to cope with the coronavirus outbreak.

    We appreciate that times are hard for all of us at the moment. And with the UK currently under lockdown, it’s easy to believe that the country has closed for business completely.

    But the truth is that clients are still speaking to us everyday, and we’re still doing deals.

    As we still have demand from developers, we are offering free desk top appraisals of land. These can be carried out remotely, so travel restrictions and social distance requirements don’t prevent us from doing the work we need to do.

    It’s also worth remembering that one day, all this will be over. Now might be a good time for people to evaluate their options – even if it’s just to discover whether they really are options at all!

    So, if you’re currently sitting at home and would consider selling land in the future, please feel free to give us a call, or drop us an email. There’s no cost, no hard-sell, and no obligation to act. In fact, you’re welcome to contact us just to find out what your land is worth.

    You might be pleasantly surprised.

    Aston Mead – your land experts.
    Telephone: 01932 950500
    Email: mail@astonmead.land

    Aston Mead calls for radical shake up of housing and planning policies

    400 250 Aston Mead Land and Planning | Land with development potential across Surrey

    Leading land agents Aston Mead are calling for radical and creative thinking from Government departments, in a New Year ‘wish list’ to help the construction industry.

    Land & Planning Director Adam Hesse says that the new Government should make use of its recent majority to launch initiatives which could make a material difference to the success of the sector nationwide.

    He said: “After years of stalling and stagnation, there’s now a new Government in place, with the support of enough members in parliament to carry out most of its wishes. But rather than sitting on its laurels, this is the time to consider some radical new approaches. We’ve already heard the Prime Minister’s Chief Advisor Dominic Cummings say that he wants to shake up Whitehall; the same should happen to housing and planning policies.”

    Hesse says that the continued existence of old problems is proof that previous attempts simply haven’t worked, and that the new Government now has a perfect New Year opportunity to consider how things can be done differently.

    He explained: “For example, if you speak to anyone in the Land & New Homes sector, they will tell you the same thing: the main issue is planning. Everyone agrees that the current system is far too clunky and slow moving because local authority planning departments are underfunded and full of de-motivated staff. So, how about offering temporary posts to retired planning officers, who could be brought out of retirement to work on a flexitime basis? That would immediately help reduce the backlog of applications, as well as ensuring that people with valuable backgrounds and experience were on hand to help.

    “Another planning issue concerns pre-application meetings. The planning officers encourage developers to take this stance, and yet very little helpful information seems to be given at such an early stage – with officers seemingly terrified to undermine themselves or colleagues by committing to anything meaningful. As well as adding to the costs, this means that planning is delayed by at least 2 months, as that seems to be the lead-in time before the planners will agree to meet with the developers to discuss a specific case.

    “Similarly, planners currently require a whole myriad of reports to accompany any application including topographical, environmental and highway analysis. These are very expensive to acquire, can be time consuming – for example bat surveys take at least six months to carry out – and after all this, there’s no guarantee that planning will be supported. Why can’t planning in principle be granted or refused up front, following submission of an outline sketch of the proposed scheme, and subject to these reports being carried out at a later date? At the moment, the whole process is far too expensive, time consuming and risky – especially for SME developers, who are arguably the lifeblood of the system.

    “Finally we need some fresh new thinking to be brought in to stamp out bad practice once properties have been built. For example, here in the UK there are masses of high streets with vacant areas above the retail shops below, which is a crying shame. In total, there must be hundreds of thousands of potential flats just sitting there, waiting to be converted. We need to encourage owners to turn these uppers into residential accommodation. So why not allow local authorities to bring in a much higher council tax for empty uppers, not allowing them to be part of the retail unit below unless proof is shown it’s in use for storage or welfare? This should provide the catalyst to focus landlords’ minds into converting this dead space. In addition, perhaps the government can introduce legislation that says anywhere vacant for more than five years could be compulsorily purchased and turned into much-needed affordable housing.”

    Hesse says that his ideas are only examples of the sort of thinking needed to generate a debate and get the new homes sector back on its feet again. He added: “Part of the problem is the ever-revolving door at the Ministry of Housing, Communities and Local Government, with 18 housing ministers in post in the past 20 years. Surely to get it right we need stability, focus and perhaps someone with a property industry background, rather than a rising star who will get restless and want to move on. Ideally, that person needs to be there for the entire five year tenure of Government, so they can get their sleeves rolled up, see policies through to completion, and really make a difference.”