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Adam Hesse

Forget stamp duty – privatise planning instead, says Aston Mead

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

Leading land agent Aston Mead says that the only way the government has any chance of hitting its housebuilding targets is by privatising the planning system.

Aston Mead Land & Planning Director Adam Hesse says reforming to the planning process should now be the focus, rather than making cuts to stamp duty – which might actually be detrimental to the property market.

He said: “For decades, housebuilding in this country has been trying to cope with a planning system that is no longer fit for purpose. It’s antiquated, understaffed and creaking at the seams – not helped by a raft of austerity cuts, which have left the system seriously overstretched and achingly slow.

“But instead of recognising this and doing something about it – as we’ve seen in the Chancellor’s recent mini-budget – the government makes tinkering changes to stamp duty, which is likely to artificially stoke house price inflation, making an eventual fall in prices inevitable.

“The trouble is, tax incentives alone don’t change the market fundamentals – which is demand outpacing supply, itself made worse by a planning system that’s simply not up to the job.”

Adam Hesse says that privatising planning would make the single biggest difference to increasing housing supply, thereby helping to keep prices down.

He explained: “Let’s face it, if a business was run like a local planning department, it wouldn’t be around very long.

“So, we need to seize what aspects business does well – conducting a slimline operation with rapid decision making, whilst keeping an eye on the bottom line – and introduce these factors into the planning system, in order to get things done.

“What’s more, we need to take the politics out of planning. When local councillors are asked to make planning judgements, they will inevitably be influenced not by what is right or good, but instead how their decision might affect the chances of them being re-elected – which is clearly madness!

“Worse still, even if planning officers advise acceptance of a proposal, they can be overruled by councillors. If the developer’s subsequent appeal is granted (often the case because the planning officer has said it ticks the necessary boxes), the council has to pay costs – which is an appalling waste of taxpayers’ money.

“Of course, in order to prevent corruption, there would need to be some checks and balances introduced into the system. But just as architects are governed by the RIBA and surveyors are governed by the RICS, there could be a similar governing body for privatised planning agencies.

“And this is not such a radical suggestion; after all, building control has already been privatised. And it’s not unknown for councils to have members of staff paid directly by developers, to help speed up the whole process.

“But if the planning system is left as it is, departments will remain understaffed and overworked, and long delays will continue. Not only will this involve all the knock-on problems for the related professions – such as architects, engineers, quantity surveyors, kitchen fitters, painters, decorators, electricians, plumbers and developers – it means thousands of potential homeowners will be denied the opportunity to purchase the property they’ve been dreaming of.”

Adam Hesse

Recruitment crisis in construction means we need a return to the YTS, say Aston Mead

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

Leading land agents Aston Mead say that the current recruitment crisis in the UK construction industry means more government spending on employment training is now essential.

Land & Planning Director Adam Hesse thinks too many school leavers are automatically opting for a university education, regardless of whether it’s the right choice for them, while ignoring the possibilities that a job in construction offers.

He said: “The latest figures from the British Chambers of Commerce indicate that over three quarters (76%) of British companies are struggling to hire new staff and the construction industry has been hardest hit.

“At the same time, the number of British 18-year olds aiming to go to university directly from school continues to increase at a record pace and now stands at unprecedented levels. This may be a boon for the world of academia, but in the real world, we need to make sure that some students might not be better off considering training for employment instead.

“Many of these youngsters still don’t know what profession they want to follow even after they’ve completed their degree, and have delayed getting a qualification as specialist plumbers, electricians or bricklayers, which could help secure them a six-figure salary, every likelihood never to be out of work, and no student debt!

“The problem is that without a radical boost in employee numbers in the building trade, we will never hit the 300,000 new homes needed across the country each year. It’s all very well the government setting a national target – but without enough people in the profession to carry it out, that figure is never going to be reached.”

Adam Hesse says that for the past few years the world of construction has suffered an identity crisis, with potential employees unaware of the vast range of professions it covers.

He explained: “We need to make jobs in construction sexy again. Its image is too male, stale and pale – whereas in reality there’s a huge number of roles that come under its umbrella, with careers in digital technology being an increasingly popular choice for many young people.

“The trouble is, we’re now fishing for workers in a shrinking pool of talent. This inevitably leads to wage inflation – but we can’t keep increasing people’s pay and fighting each other for the right candidates. So, the profession also needs to up its game as far as offering a decent work/life balance is concerned.

“Above all, we need a return to something like the days of the Youth Training Scheme (YTS), helping young people train for a career, with up to two years of paid employment and a full grounding in their chosen profession. Training places would be guaranteed by the government, with a standardised form of certification at the end. Trainees could be recruited by employers, or via a training organisation, using employers as training placements.

“Make no mistake – the labour shortage is unquestionably the biggest fear for the industry in 2022. To prevent university being seen as the ‘default’ option for so many, we need to better sell the very real advantages of a career in construction. And without a serious input of government money into training, this will be a problem that will continue to haunt us for decades to come.”

Charles Hesse

Street Votes plan “unworkable and unfair”, say Aston Mead

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

Leading land agents Aston Mead have dismissed proposed changes to planning rules announced in the Queen’s Speech this week as “unworkable and unfair”.

The Government’s Levelling Up and Regeneration Bill would allow ‘street votes’ with new housing developments being blocked if a two-thirds ‘super-majority’ of residents do not agree to support a plan.

The ‘street votes’ scheme also goes a step further in giving communities a say, where most loft conversions, conservatories and extensions could be built without full planning permission, as long as a third of neighbours did not object.

Aston Mead Land & Planning Director Charles Hesse said: “These proposals are deeply flawed. There will always be a proportion of local residents who are opposed to any sort of change, at any time in the future – even when they haven’t considered the benefits those changes might bring. They seem to believe that despite a growing population with new and different needs and requirements, a policy of preserving the past in some sort of architectural aspic is the best option.

“The truth is that this kind of approach gives a minority of people the majority of the power. And it will make plans for much needed new homes on some sites simply unworkable – which is why it’s so unfair. In fact, one of our planning contacts told me this week that this current Tory government is the most anti-housing government he has known in a lifetime.”

The Levelling Up Bill would also impose a non-negotiable levy on the value of new development, with a proportion of developer profits being used to fund schools, surgeries and roads. It’s hoped this would encourage residents to agree to more local housebuilding, replacing ‘Section 106’ contributions whereby developers pay for infrastructure to meet the needs of the area in which they are building.

Charles Hesse added: “Of course, we think that there should be an element of affordable housing provided on each large site; that goes without saying. But any money paid by developers to the local authority should be ringfenced and used to supply affordable houses on its own land. The council can then offer those homes at low rent, rather than having to pay landlords housing benefit. This would give the local authority more control, add protection from abuse, and provide it with a long-term financial plan.

“But as far as ‘street votes’ are concerned, even if giving residents so much control sounds desirable and democratic at first hearing, it is simply not possible for local residents to decide absolutely everything about urban planning in their area.

“Quite rightly, former Housing Secretary Robert Jenrick told the House of Commons this week that despite acknowledging how crucial it was to build hundreds of thousands of new homes, successive governments have failed to do so.

“I’m afraid to say that after hearing proposals such as these, there’s every chance this government will follow suit.”

Adam Hesse

Aston Mead herald ‘worst planning environment in a generation’, as local authority plans are delayed yet again

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

Leading land agents Aston Mead say the current planning environment is the worst they have had to work in since their business was founded over 20 years ago.

Aston Mead Land & Planning Director Adam Hesse explained: “Without doubt, this is the worst planning environment we’ve had to face in a generation. The system was already unfit for purpose before Covid struck. But since then, three key factors have emerged to make a bad situation even worse.

“Firstly, and most recently, the biggest blow has come from the Government itself, with reports that it has scrapped plans for a standalone planning bill, which would have delivered many of the proposals in the white paper. This, on top of the Prime Minister’s comments at last year’s Conservative Party Conference about not building on greenfield sites has meant several local authorities have put a halt to their Local Plans, saying that they now need more direction from the top.

“One of our clients has recently received notice of withdrawal of the publication version of their regional authority’s Local Plan, which had been submitted to the Secretary of State back in 2019. He’s been told that the lack of new guidance from the government has made the council reluctant to go any further.

“Secondly, there are difficulties at the Local Authority level, who are finding every reason to kick the issue into the long grass. This means that the planning process has almost ground to a halt. Ideally, planning applications should be heard in eight to twelve weeks – but most cases we are dealing with are taking at least three months to get validated, and then at least six months to get a result. In fact, we are still waiting for decisions on a number of our sites after more than a year and there are even some that have been stuck in the system for three years now!

“Even if the assigned planning officer supports an application, councillors will often refuse it for political reasons. We have never seen so many sites go to appeal – a process which used to take six months but is now taking up to a year.

“Finally, there are all the usual problems like underfunding, lack of staff, and demoralisation. Added to which, we are still witnessing a public sector reluctance to get back to the office, which slams the brakes on even further.

“Overall, this toxic combination of factors has created a perfect storm, where we now risk local plans having to be rewritten or more research carried out because the current evidence is out of date.

“This could add years to the whole process. But in the meantime, if there aren’t enough brownfield sites available, more greenbelt land will have to be released, in order to catch up. So, the net result will mean more building on greenfield sites, not less!”

 

Adam Hesse

Councils struggling to find brownfield sites should look in their own backyard first, says Aston Mead

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

Leading land agent Aston Mead says that councils now suspending their local plans to avoid building on greenfield land should consider releasing brownfield sites they already own.

Some councils are reported to be putting their local plans on hold after Boris Johnson suggested developers should build homes ‘not on green fields’ at the Conservative Party conference last month. His comment led some local authorities – including Welwyn Hatfield Borough Council in Hertfordshire – to put meetings to discuss its local plan on indefinite hold, using the Prime Minister’s words to justify doing so.

Aston Mead Land & Planning Director Adam Hesse commented: “Putting their plans on hold will prevent councils from having to make a decision about releasing greenbelt land and select brownfield sites instead. But to be frank, the government needs to look in its own backyard before beating developers with the brownfield stick. As some of the largest landowners in the country, local authorities have a wealth of untapped brownfield sites on their doorstep, if only they were prepared to let them go.”

But Adam Hesse says that some greenfield land will inevitably have to be built upon if the government is to hit its target of constructing 300,000 new homes every year.

He explains: “The truth is, even with this week’s news of £624m of government loan funding, brownfield sites are only half the story. After all, if building on brownfield land was so simple, every developer would already be doing it because planning permission in such cases is almost a given.

“However, town centre brownfield land is often either contaminated and too expensive to reclaim, or already occupied by light industry who would have to be moved elsewhere. It’s no good saying we need more building on brownfield sites when they’re not readily available.

“Instead, councils would have to have a policy of building new light industrial units on land they own outside town centres, in order to relocate the companies concerned. This would certainly make much more sense than risking millions of pounds of taxpayers’ money buying shopping complexes hundreds of miles away outside their patch, which were often massively overpriced even before the Covid pandemic.

“In fact, if they had spent some of that commercial money on developing the land they own, they would have created a stack of affordable homes which they could have rented directly, rather than paying landlords to put up tenants and families who need accommodation.

“Such a policy would have the added advantage of moving existing businesses to new, modern buildings with greener credentials, and cut down on heavy lorries polluting town centres. However, there’s no getting away from it – this would mean building on greenbelt.

“But as we’ve said for years now, there is plenty of what we call ‘grubby greenbelt’ – land around railway lines and road junctions of no scenic value whatsoever, which might actually be improved by building on it.”

Richard Watkins

Pause to planning reforms will lead to hiatus in housebuilding, says Aston Mead

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

Leading land agent Aston Mead says the government’s decision to put its flagship planning reforms on hold will lead to a slow-down or even a halt in the construction of new homes in the near future.

The announcement to pause the biggest shake-up in the planning system in England for 70 years was made by new Housing Secretary Michael Gove, who replaced Robert Jenrick in a cabinet re-shuffle last week.

The changes would have forced all councils to draw up 10-year plans, with land designated as ‘protected’, ‘renewal’ or ‘growth’. In growth zones, any proposal meeting the local design code would have been waived through without the need for specific planning permission.

Aston Mead Land & Planning Director Richard Watkins said: “Putting these reforms on hold now makes it unlikely that the government will meet its target of building 300,000 new homes a year. Uncertainty like this means housebuilders will sit on their hands because they simply don’t know what’s going to happen next.

“What is certain is that things need to change. The problems with the planning system that were identified in the government white paper are still there.

“Everybody also agrees that we need to build more homes in this country. But while there’s a lack of decision about how exactly we do that, housebuilders will simply watch and wait. And while they wait, some new homes will simply not be built.”

In 2020, research conducted by the BBC found the difference between current housing stock and the number needed for everyone to have a decent home to live in is one million properties.

Richard Watkins added: “The current planning system is absurdly inefficient. It allows some local authorities off the hook when it comes to housing targets, and gives individuals a vast array of options when it comes to objecting. Of course, there’s also the danger that delays in removing obstacles to home-building will mean the prices of rentals will rocket.

“Michael Gove is the most high-profile Housing Secretary in years and has a reputation as a radical reformer. At the moment, we will have to wait and see whether he will cause winds of change in the industry and genuinely deliver what is needed, or instead opt for the sort of compromise that will leave house building in this country languishing in the doldrums.”

Charles Hesse

Aston Mead says time limits on land lay blame at wrong door

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

Leading land agent Aston Mead says government plans to introduce time limits for building on land with planning consent, with levies if developers miss deadlines, are fundamentally misguided.

The company’s comments follow news that a ‘use it or lose it’ scheme is being considered by ministers, to try to increase construction rates in the industry.

Aston Mead Land & Planning Director Charles Hesse said: “Unfortunately, the idea of time limits on land lays blame for slow build rates at entirely the wrong door. It suggests that developers are deliberately holding back from starting construction on sites, even when planning permission has been approved.

“But as a government report concluded as recently as 2018, there’s no evidence that delays are down to land being deliberately hoarded by developers. Instead, the finger of blame should be pointed fairly and squarely at the planning system – which, frankly, is currently not fit for purpose.”

Charles Hesse says that rather than beating developers with a stick, time and money would be better spent on making sure planning departments were fully funded, to enable permissions to be given more quickly.

He explains: “Take one of the UK’s biggest housebuilders, Taylor Wimpey. They have around 40,000 plots with implementable planning permission and have started developing on 94.5% of them. The remainder have issues like Tree Protection Orders or other pre-conditions preventing construction from getting underway. They simply don’t have any sites that they are not currently progressing.

“But the same is true for smaller developers as well. To suggest otherwise demonstrates a fundamental misunderstanding about how housebuilders run their businesses. Developers’ profits are generated from selling homes, not from an increase in the value of land they own. They never sit on sites, even when market conditions are tough. The idea that they spend their time acting like financial investors, speculating over future land values is a complete and utter myth.

“Without question, of course there are barriers to development out there. But they lie in under-funded and over-worked planning departments, each trying to deal with an avalanche of requests, without the staffing or capabilities to handle them.

“Yes, we could do with a wider variety of homes in each development, differing in size, design and setting, to increase the appeal to a range of markets.

“But the government seems deaf to the results of a series of reviews it has itself commissioned, which have warned of the downsides of such a policy. They need to listen to what the industry is telling them, reform the planning system to make it simpler, faster and more agile – and then perhaps the target figure of 300,000 homes per year could be reached after all.”

Adam Hesse

Developers have been made the whipping boy for alleged land banking when it’s the planning system that’s at fault, says Aston Mead

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

Leading land agent Aston Mead has questioned new recommendations to penalise developers who fail to build new homes on sites they have acquired, despite having been given planning permission.

The suggestions have been made in a wide-ranging report on the government’s proposed planning changes, published by the Housing, Communities and Local Government (HCLG) Committee.

The report urges the government to ‘set a limit of 18 months following discharge of planning conditions for work to commence on site’, after which permission ‘may be revoked’. Following a further 18 months for development to be completed, the local authority ‘should be able to levy full council tax for each housing unit which has not been completed’.

Aston Mead Land & Planning Director Adam Hesse said: “Firstly, the idea of charging council tax on uncompleted homes is a complete non-starter. Any barrister worth their salt working on behalf of a developer would be able to point out that this would be charging for services – like maintaining roads, collecting bins, and cleaning streets – which were not yet being provided. They would have to create a new levy instead, but it wouldn’t be council tax!

“Secondly, all of this presupposes that developers are deliberately sitting on land they’ve acquired and doing nothing with it – or what has become known as ‘land banking’. But to be honest, we are at a loss to see where these claims are coming from.

“As land agents for the past twenty years, we’ve been working day in, day out, with people who buy and sell land. That’s what we do. And I can honestly say that for every single site that we’ve sold in that time, I don’t know any company which hasn’t built out as quickly as possible.”

An investigation into land banking in the housing industry conducted by Sir Oliver Letwin under Theresa May’s government and published as recently as 2018 concluded that it was not an important factor in slow build rates.

Adam Hesse says the perception that developers are land banking demonstrates a fundamental misunderstanding about how housebuilders run their businesses.

He explains: “Housebuilders’ profits are generated from selling homes, not from an increase in the value of land they own. The idea that they spend their time acting like financial investors, speculating over future land values is a myth.

“If anything, it’s the absorption rate which is slowing delivery; most housebuilders simply build out sites at the pace demanded by local market conditions. Admittedly, they could help themselves by producing a wider variety of homes in each development, differing in size, design and setting, to increase the appeal to a range of markets. That could accelerate built out rates substantially.

“But the truth is that developers have been used as the whipping boy for the slow pace of development, when actually it’s the planning system which is at fault. One minute it’s Nimbys protesting about development, the next it’s MPs saying you’re not building fast enough!

“So rather than beating developers with a stick, time and money would be better spent on making sure planning departments were fully funded, to enable permissions to be given more quickly. That’s the only way we’ll get to building the target figure of 300,000 homes per year the government are demanding.”

Natasha Aston Mead

Sell land now to avoid higher taxes later, say Aston Mead

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

Leading land agents Aston Mead are advising anyone who is considering selling land to do so as soon as possible, before the UK government introduces tax rises to help pay for the Coronavirus crisis.

The Chancellor Rishi Sunak has already warned that “hard choices” will need to be made, after the state pumped over £200bn extra into the economy to support jobs, business and incomes. Meanwhile, the Institute for Fiscal Studies has said borrowing will hit levels not previously seen in peacetime, which will mean that tax rises of more than £40bn a year are “all but inevitable”.

Aston Mead Land Consultant Natasha Burr said “Make no mistake – when the Chancellor talks about ‘hard choices’, he’s talking about tax rises. And as one of the largest sectors of the UK economy, he is likely to see property transactions as low-hanging fruit, ripe for picking.

“So if you have land to sell, and want to avoid any additional taxes, we would advise you to do so sooner rather than later. After all, at the moment, selling-off part of your garden can be carried out completely tax-free. But there are no guarantees the situation will stay that way.”

Natasha Burr points out that previous Conservative manifesto commitments might prevent raises to the three biggest taxes – income tax, national insurance and VAT, which currently bring in more than half of government revenue.

She adds: “At the moment, state pensions are protected by a so-called ‘triple lock’, which guarantees they rise with wages, prices, or 2.5% every year, whichever is highest. Cutting spending might be difficult too – especially on health when the NHS has been pushed to its limits during the pandemic.

“But one tax noticeable by its absence in this list is Capital Gains Tax (CGT). The Chancellor could decide to align rates more closely with income tax – something which could theoretically raise an additional £14bn a year for the exchequer. Similarly, there are suggestions that the annual tax-free amount could drop to as little as £1,000. Both of these measures would have a huge impact on the finances of those selling land.

“Finally, of course, there is of course the option of a new tax. There could be a Covid-19 levy on payslips and tax returns which could be created to pay off the virus debt – something which would probably last for decades.

“The truth is – nobody knows how big the final Covid bill is going to be, and nobody knows what measures will be taken to pay for it. But the easy solution to avoid any future tax rises is to sell land now to avoid a nasty surprise later.

“Recognising that getting planning permission on any proposed area of land can take some considerable time, if you want to squeeze the maximum out of your next investment decision by selling land, you need expert advice now. And we’re happy to provide it.”

Adam Hesse

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.”

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