Is the government’s £1m new homes by 2020 target achievable?

The government pledged in the recent Housing and Planning Bill that it would build a million new homes by 2020, a target that property developer Richard Carr felt was slightly ambitious.

Achievable

Richard Carr 200,000 homes image

Is the government’s target achievable?

However, land agent Aston Mead has hit back at doubters claiming that the target is based on current figures and is a reality.

In contrast, a recent survey of owner and directors of 389 house builders across England found that a small majority (51%) thought that the target would not be met.

Current output of homes is increasing rapidly, with build rates on large sites doubling since 2010. There were more than 180,000 new homes delivered in 2014/2015, with this year’s figure expected to be higher still.

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MPs support increase in planning fees

A poll conducted by the British Property Federation (BPF) has found that they majority of UK parliamentarians support a rise in planning fees to help under resourced local planning authorities.

Increases

Richard Carr Planning Permission

Planning fees set to rise

61% of MPs agreed that fees should increase, whilst 47% say they should increase but with stronger guarantees on planning performance. The feeling was supported by the country’s two main political parties. Labour MPs voted in favour by 65% and the Conservative’s by 61%.

In a survey conducted by the BPF and GL Hearn in 2015, 55% of local planning authorities cited under resourcing as a major challenge, whilst 65% of applicants said they would be happy to pay extra to reduced waiting times.

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Real Estate investors spark concerns about Brexit

As the EU referendum draws ever closer investors of global real estate have sparked concerns about how Brexit may affect property investment in the UK, writes property developer Richard Carr.

Impact

Richard Carr

Is Brexit good for property investment?

KPMG surveyed 25 real estate investors who held funds and assets in excess of $400 million about the impact that Brexit would have on property investment.

The majority felt that leaving the EU would result in a decrease of inward investment into UK property and property companies.

Over two thirds said they would slow down investment into UK property whilst Britain and the EU worked out new terms of engagement following Brexit.

As a result, the market would face some serious danger which could potentially be more damaging than the stable post-Brexit would be.

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The UK still remains a highly attractive investment for the Chinese

Despite the upcoming EU referendum in June, Estate agent Savills doesn’t expect this to have any effect on commercial property investment with Chinese investment set to exceed last year’s levels.

Safe haven

Richard Carr image of Leeds

The UK’s commercial property sector continues to attract overseas investors

Last October the Chinese President made a state visit to the country and following it the UK’s commercial property market was described as a “safe haven” for Chinese investors.

And they have heeded the advice!

A staggering £560.3m of Chinese transactions have already been made in the London commercial real estate market since the beginning of the year to the end of February.

During the state visit, PM David Cameron visited Manchester with Chinese President Xi Jinping and said the north of England would create new partnerships with China to unlock the potential of the northern powerhouse.

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Development taxes continue to push property prices up

Property Developer Richard Carr believes development taxes such as Community Infrastructure Levy (CIL) and s106 payments are the reason behind the increasing house prices in the UK.

Increases

Richard Carr comments on rising house prices

Is development tax a reason for increasing house prices?

The average price of a home in England and Wales has now surpassed £300,000 for the first time ever and Richard believes there are two main factors for this:

  1. Development Taxes
  2. Demand outweighing supply

On the first point, he doesn’t understand the government’s current process. Developers are charged large amounts of CIL and s106 by local planning authorities which means that the price of the finished product is increased.

The government has therefore had to introduce a number of Help to Buy schemes to help first time buyers, using money funded by development tax!

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Commercial Property facing a stamp duty tax raid

This week the government announced new stamp duty rates commercial property in the UK, but who will benefit and who will lose out?

Property Developer Richard Carr believes this is another example of the government using the stamp duty to tax raid the industry. As with CIL and s106, Richard believes the government should be relaxing tax not making it more expensive.

New calculations

Richard Carr talks about commerical office rents

The government has made another stamp duty tax raid on commercial property

According to propertywire.com, investors in large commercial property in the UK will see a rise in stamp duty rates, whereas buyers of smaller properties will benefit from a reduction in the tax payable.

As of today (March 17th) stamp duty will no longer be applied to the whole transaction fee, but to bands based on a portion of the fee.

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Richard Carr pleased to see permanent office to residential rights confirmed

Property Developer Richard Carr is pleased to see the government make one of its better housing initiatives permanent as of April 6th, 2016.

Permitted developments

Richard Carr comments on Permitted Development Rights

Richard Carr believes the Permitted Development Rights Order is a clever idea from the government

The amendment to the General Permitted Development Order was introduced almost two years ago on a temporary basis, however following the Prime Minister’s heralding of the change it will be made permanent on April 6th.

Richard Carr believes its introduction was a clever move by the government and believes it will help increase building in the country.

Upon being made a permanent amendment new conditions were added to it. Local planning authorities can consider “impacts of noise from commercial premises on the intended occupiers of the development”.

Also, the changes agreed through planning will have to be completed within three years of prior approval.

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Property Developer Richard Carr calls for a relaxation in development tax

Press Release

  • Poole-based property developer wants clarification on CIL and s106 payments
  • Carr believes developers are put off by high taxes involved on developments
  • A relaxation in taxes would be beneficial for the industry and help the housing shortfall

Community Infrastructure Levy (CIL) and s106 payments are no longer viable property taxes according to Poole-based property developer Richard Carr.

Carr, who has worked in the industry for over 30 years, believes the taxes are seriously affecting the industry and are a factor in the current housing shortage that the country is battling with.

Expanding on the point, he said: “I’m very much for paying taxes and have done all my business life – and I believe property taxes can work and help projects such as social housing and community infrastructure if they are used correctly, however my problem is that I don’t believe they are.

“Community Infrastructure Levy is an outdated tax that developers have become disillusioned with. The line between CIL and s106 payments has become faded and clarification is need from the government to explain why they are in place.”

Currently, ministers are debating new proposals for development property tax and how it will be applied. Planning Minister Brandon Lewis is considering an overhaul of S106 payments and CIL.

Carr added: “I believe they should be abolished for 24 months on condition that the development is started within 12 months from grant; it should only be implemented on Greenfield sites that are inherently cheaper to develop.

“How can it be correct for a developer to pay £385 planning fees on a 500 square foot flat and the same for an 18,000 square foot house?”

Ministers propose changes to CIL and s106 payments

In a move which has delighted property developer Richard Carr, Ministers unveiled last week details of planning reforms and ‘financial benefits’ reporting.

Developers to benefit

Get rid of CIL says Richard Carr

Richard Carr supports the reduction of CIL

The government has proposed that council tax revenue, business rate revenue and s106 payments should all be included in the new report.

Ministers also confirm that the new requirements to set out the financial benefits of planning applications would be drawn widely and take into account a variety of factors.

The report will look at and go beyond ‘local finance considerations’ and take into Community Infrastructure Levy.

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Does the government have a short term approach to house building?

Propertywire.com raised an interesting point recently regarding the government’s view to house building and in their attempts to build as many homes as possible, have they lost sight of design and build quality?

Targets

Richard Carr house building

Is the government bothered about design and build quality?

Property developer Richard Carr has always felt that the government’s target of building 200,000 new homes by 2020 was very ambitious. His 30 years’ experience in the industry and knowing the current issues with the planning system lead him to believe that the claim was used to gain votes rather than be put into practice.

Despite being a long way off their target, the government has continued to use this target and house building has increased slightly. At what cost, though?

A report published by the House of Lords Built Environment Select Committee Report has questioned if the government’s short term approach to building will negatively affect design and quality.

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