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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.”

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.”

Richard Watkins

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

370 230 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.”

AM blog image

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

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.”