|The UK government plans to release public land for house building to help alleviate the nation’s chronic shortage of residential properties.|
From this autumn every government department with significant land banks will publish plans to release thousands of acres of previously developed land to house builders to build up to 100,000 new homes and create 25,000 jobs by 2015.
The Public Expenditure Committee, a Cabinet Committee chaired by Francis Maude, will go through each department's plans with a fine tooth comb, to make sure every possible site is made available for house building.
Alongside this, property specialists from across Government will work with each department and challenge them to release as much land as they can for new homes.
Ministers are also encouraging councils to follow the lead set by central Government and make their unused land available for development.
Later this year, a new map will be launched to show land and buildings owned by public bodies in each area. A new Community Right to Reclaim Land has been introduced enabling residents to apply to organisations including central Government departments and councils to bring their sites back into use, opening up the books so local people can see for themselves the assets held by central and local Government alike.
Housing Minister Grant Shapps also announced a radical Build Now, Pay Later deal, which offers a boost to house builders who will only pay for the land once work has started on the new homes, providing a lifeline to those struggling with cash flow problems, and enabling them to start building straight away.
‘As one of the country's biggest landlords, the government has a critical role to play in making sites available for developers so we can get the homes this country needs built. Over the coming months, property specialists will work to make sure no stone is left unturned and no site is left unused, and every department's plans will come under the close scrutiny of a Cabinet committee,’ he said.
‘It is now up to developers to come forward to make the most of this unique opportunity, and help contribute to our country wide efforts to help get the homes this country needs built,’ he added.
Builders and developers reacted positively. ‘This is a big step in the right direction. The rapid release of publicly owned land has the potential to be an effective catalyst for increasing the supply of land for new homes in this country during the next few years,’ said Mark Clare, chief executive of Barratt Developments.
Liz Peace, chief executive of the British Property Federation, said that as one of the biggest holders of land in the country it's right that the Government does what it to help alleviate the housing crisis.
‘However, government must give consideration to who has the resources available to get on and build these homes, particularly while banks are still nervous about lending. Institutional investors have access to the scale of funding needed to develop first rate homes to rent, and central and local Government, through its planning powers and capacity to release land can ensure that such schemes become reality,’ she added.
Jasper Masters, head of residential Land Agency at consultants CB Richard Ellis, said the payment deals are important. ‘Since the crash, many of the larger land deals outside of London have been conditional on planning and generally on deferred payment terms, so the government's new model will fit with the reality of the marketplace,’ he explained.
His colleague Stephen Clark, senior director, Government & Infrastructure, described using public sector land for housing development through an accelerated disposal programme as an excellent proposal. ‘Increasing housing supply is critical at present to support future economic growth,’ he said.
But he added that the government will need to be committed to the programme for it to be successful as previous initiatives such as the public land register have fallen by the wayside. ‘Much will depend on where the major sites lie, as the housing market is quite stagnant outside London and pockets of the South East. Encouragingly 28% of the Homes & Communities Agency’s holdings lie in the South East and East of England, although just 3% is in London.
‘Innovative funding structures in the form of asset backed vehicles and Build now, Pay later should help to progress the programme, particularly given the continuing lack of bank lending. In order to create sustainable communities, it will be important to bring open market and affordable housing on-stream together as no grant will be available for the latter. This will impact on the level of receipts although it is acknowledged that this is only part of the government’s overall consideration,’ he added.