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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

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.”

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.”

Aston Mead Land

Aston Mead welcomes planning proposals “fit for the 21st Century”

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

Richard WatkinsLeading land agents Aston Mead have welcomed Government proposals to launch a planning revolution, which promises to deliver 300,000 new homes a year.

The reform of the planning system was announced last week by Housing Secretary Robert Jenrick, to ensure it is “fit for the demands of the modern world.” Under the proposals, councils will be told to turbo-charge planning approvals, with Government intervention should they fail, and homeowners in detached houses being able to build upwards by two storeys without any extra consent at all.

Aston Mead Land & Planning Director Richard Watkins says: “As anyone who has seen our regular media announcements already knows, we’ve been calling for more relaxed planning regulations for years. In fact, the current system is the biggest barrier to getting more houses built. The new proposals would at long last make the country’s planning system fit for the 21st Century.”

The plans include a policy of putting brownfield sites first, allowing mayors and local councils to bring forward proposals to help get the most out of unused land in urban areas that is often going to waste, while protecting the green belt. A register of brownfield sites suitable for housing is due to be launched, which will map out unused land, and make sure that councils get the support they need to put it to best use. All local planning authorities will also be required to have up-to-date local plans in place by December 2023.

Richard Watkins adds: “There is also a call for proposals for building above railway stations, and an encouragement for councils to ensure that the redevelopment of high streets is housing-led – both of which are reforms we have explicitly suggested in recent months.

“The truth is that more planning freedoms are essential to get the country building again. The whole process needs to be speeded up and simplified, as well as being made more innovative and less bureaucratic, with more local people involved in the decisions which are being made.”

Richard Watkins believes that planning departments need to take a much more pragmatic, ‘can do’ approach. He explains: “Departments are often understaffed and in some cases involve talking to several different planners for a single application – and this has to stop if targets are going to be hit. Many developers feel it is them against us, but in fact we should be all working together to deliver much needed housing.

“Admittedly, whilst the Coronavirus outbreak has put many plans onto the back burner, it’s good to see Government policy heading in the right direction. Hopefully, when the current crisis is over, even if the amount of finance available is reduced, the same zest and drive for ambitious planning will win through.”

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.”