Land Banking / Compulsory purchase
Following the Chancellor’s presentation to Parliament in November on the Autumn Budget 2017, a big topic was its pledge to meet a target of building 300,000 new homes a year by the middle of the next decade, something that has not being achieved since 1970! The Chancellor promised £15.3 billion on new financial support for house building over the next five years, as well as £2.7 billion for infrastructure to support the construction of the desperately required houses.
Compulsory Purchase of so called “Land banked” land, which the government suggest developers are holding onto for financial reasons, instead of building on it, the Government have put £1.2 billion aside to buy land. They have stated there will be changes to the planning system to encourage better use of land in cities and towns, so helping to protect the green belt.
95% of first-time buyers will be encouraged by the abolition the stamp duty land tax on homes under £300,000, and to help those in London and other expensive areas, first time buyers paying over this rate up to £500,000 will pay the normal rates of stamp duty on the price above the £300,000. Above £500,000 and there will be no relief, but this probably won’t worry many first-time buyers outside, or north of, London!
So, 2018 is set to be a busy year for the construction industry, and to avoid a compulsory purchase order, developers will no doubt want to put wheels in motion to start their build, even though they may not have enough skilled labour on their books to do the works as fast as the Government would like. Again, this has been recognised and £34 million will go towards teaching construction skills like bricklaying and plastering, but these skills are not taught overnight.
People can argue that compulsory purchase powers are a must especially when it comes to helping to regenerate run down areas. Since land-owners will only be offered the market value prevailing at the time of valuation based on the condition of the land without any structures on it, they may struggle to get what they paid for the land if a compulsory purchase is forced upon them. This will encourage those whose land is affected to enter into meaningful negotiations with the local authority and they will have to demonstrate that they are taking reasonable steps to start the build.
A house builder that has had to make a start on site will need a secure steel hoarding compound like the one from Rethync Ltd. Their Multisite Steel hoarding system will last the length of the project without maintenance and can be moved onto the next site on completion of the works.