16 August 2015, Both the commercial and residential development sectors are now moving significantly faster than they were two years ago. The residential sector in particular has helped drive the economy out of recession and the Conservative Government has reinforced the emphasis put by the Coalition Government on the target to build 300,000 plus new homes per annum.
Recent government initiatives through tweaks to the planning system have included the right to convert offices to residential without requiring formal planning consent and a simplification of the planning procedure for residential development on Brownfield sites. Arguably that has partially released the pressure on Greenfield sites, however these initiatives do not go very far in meeting the pent up demand for 2, 3 & 4 bedroom houses.
Call for sites by local councils are in hand at the moment in Hambleton and Harrogate are an opportunity to put land forward for development, but even where plans move onto the next stage, such as in Leeds, there are still opportunities. Essentially, planning arguments can be built in favour of development if there is shown to be a shortage in the housing land supply and indeed similarly for any employment land supply.
Landowners can of course promote the site themselves, but given the significant time and cost and not to say frustration with the planning system, many of our clients seek to “partner” with a developer, who will put a team in place to take on the time and cost.
This of course relies upon the negotiation of an appropriate development agreement with the development partner.
We have seen a significant growth over the last few years in this sector and are now dealing with around 4,000 acres of development land which is subject to development agreements or has a development agreement about to be put in place. The sites are across Yorkshire and the whole of the North of England.
Our extensive experience in this sector enables us to secure the best outcome for landowners. To do this, it is essential to be fully up to speed with the latest nuances of development agreements, planning policy and to be prepared to monitor the sites through the process and negotiate development terms which ensure the best price is achieved.
Once specified criteria within the development agreement have been fulfilled, then the developer can either purchase the site at a discounted market value, or bring the site to the market for sale, taking a share of the sale proceeds as their reward
Given the process could take up to 10 years for a complex large site, the ability to have negotiated terms from the outset which envisage a range of potential outcomes is essential. It is also helpful to have ongoing relationships on a number of sites with any given developer to understand their procedures and maintain a pragmatic approach. Building relationships over the medium to long term with developers is key.
The next couple of years looks set to be the best time over the last decade to take advantage of the current market and planning regime.