Development prospects

Posted by on Jan 12, 2017 in Uncategorised | Comments Off on Development prospects

Whatever you might think of immigration it is clear that housing demand is growing and this part of East Anglia feels the pressure more than most. Edge Analytics produced a report in May 2015 that suggested Essex needs to build 190,000 new houses between 2012 and 2037. These figures, together with other evidence, are being processed by the various District Councils for incorporation into the emerging Local Plans.

Many local authorities are rushing to get an adopted Local Plan in place following the Government’s announcement in October 2015 that ‘if councils fail to produce and bring into force an up to date plan for new homes by 2017, we will work with local people to ensure one is drawn up’. As the local plan review process is a lengthy one it is likely that many authorities will not meet this target but it is assumed that, provided they are making good progress, Government will not immediately intervene.
The anticipated Local Plan adoption timescale for adjoining authorities are:

Braintree Spring 2018
Uttlesford Winter 2017
Colchester Autumn 2018
Chelmsford Winter 2018

One of the key provisions of the Local Plan is to demonstrate a 5 year land supply for housing. The lack of this supply increases the chances of a planning consent on appeal for ‘sustainable development’. Whilst the Council’s will generally insist they have a 5 year supply this has been successfully challenged in some cases on the basis that the identified sites are not deliverable within 5 years.

Developer Approaches
The lack of an up to date Local Plan and the question marks over the 5 year land supply has led to many landowners getting approaches from developers offering option or promotion agreements over an area of land. Most landowners would welcome the chance to realise a significant uplift in value but we would caution against simply signing the terms that you are initially offered.

Particular points to consider include:

1. Reputation. Does the developer have a good track record?
2. Price. What share of the value uplift is the developer looking for?
3. Timescale. How long is the agreement and when will a planning application be submitted?
4. Premium. What payment is offered to the landowner for entering into the agreement?
5. Costs. Will the landowner’s costs be met, whether or not a final agreement is reached?
6. Conflict of Interest. Does the developer have any competing schemes?
7. Value. Remember that an option holder may want to minimise land value whilst a promoter wants to maximize it.

There are a host of other issues that must be covered. Land Partners can help you in this process which will be essential to maximizing both the short term and long term returns from your potential development land.