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Public Land Release for New Homes
Housebuilder – February 2012

We have had initiatives to release public land for housing development before, and they came to nothing. What is different about the latest plans and will they work? Mark Smulian reports

Complaints from housebuilders about the public sector's willingness to designate land for building will surely have been at least temporarily stilled by last autumn's announcement of enough sites for 50,000 homes.

Housing minister Grant Shapps published the results of an exhaustive trawl round the estates of the Ministry of Defence, Department of Health, Department of Transport and Department of the Environment, Food and Rural Affairs, which found these bodies sitting on enough spare land to build enough homes to populate a city the size of Leicester twice over.

It is enough to get the government halfway to its target of finding enough public land to build 100,000 homes by 2015, and the Homes and Communities Agency had earlier contributed land for 11,000 homes to the process.

Even better, the "build now, pay later" model will be available for some developments, and the government wants builders on site as swiftly as possible.

land registers

We have, of course, been here before. The Land Registers of the late 1980s were supposed to release surplus public land, and other initiatives have come and gone to limited effect.

So, what is different this time? Is it safe for builders to assume that a bid to develop these sites will not be met by bureaucratic stonewalling from a department anxious to hang on to its land for some vague future purpose?

The HCA is working with departments to bring this land to market and Claire O'Shaughnessy, its head of land and regeneration, says: "What is different this time is the absolute commitment from senior levels of government to this. Indeed the prime minister mentioned it in his party conference speech."

"This is seen as an important part of starting the economy and it needs big schemes to work." The departments have come up with a decidedly mixed bag of sites in terms of location, condition and ease of gaining planning permission.

But O'Shaughnessy points out that 64% of the sites are located in the east, south east and south west of England - the programme is for England only - "so whichever way you cut that you have a huge proportion in areas where the market has proved fairly resilient".

She insists the land will all have been brought to market by 2015 and the HCA wants to work with industry to address capacity issues; this is, after all, a lot of homes to build in three years.

"My sense is that the industry is keen to take this on," she says. "We can use 'build now, pay later' so that allows builders to take the land and pay when homes are sold or against some other delivery milestone and we have had a lot of feedback that this will be attractive to housebuilders."

formal process

Some sites are straightforward and departments will simply sell them at auction or by advertisement, though larger ones may need a formal procurement process for a developer. Builders outside the HCA's delivery partner panel will be eligible to bid for all or parts of sites, O'Shaughnessy says.

The catch, possibly, is the cost of infrastructure. Some former military bases, for example, have water and electricity supplies adequate for their former uses but not for a small town. Others will need better road links.

O'Shaughnessy explains that it is for each department to use its capital programme for infrastructure works where needed, and for it to decide how to do this as part of a commercial deal with a developer.

Stephen Teagle, managing director of the affordable housing and regeneration division of Galliford Try, is looking at the potential of some of the sites.

"There have already been releases by the HCA and while that land has been of variable quality, it has all been eminently developable with potential for both speculative and affordable housing," he says.

"I do anticipate that there will be sites that will require a lot of investment in infrastructure. That is the issue rather then the quality of the land."

He points out that if the government wants to meet its target of 100,000 units by 2015 it will have to deal with infrastructure needs.

"These may need electricity, gas, water and transport, also community infrastructure, such as education, and hospitals, the whole gamut of it," Teagle says.

Planning consents may be an issue. He says: "I imagine the sites brought forward will be in places where planning will allow development though we do not know that yet. They won't, I think, be moorland upland, but places that are relatively well located."

HBF issue

Home Builders Federation director of external affairs John Slaughter welcomed the land releases, something for which he says the HBF has long pressed.

"There are bound to be some sites that are not as good as others, but there is no clear view from members on how much of an issue that is, or may be, and I think some sites will be quite challenging because they are isolated or lack infrastructure," he says.

"The other major factor will be planning. These sites might be remote from population centres and lack transport and community infrastructure. That is going to pose challenges of whether they fit with planning policy considerations."

He adds: "Grant Shapps has stressed that this is being driven by Number 10 and that makes it different to past exercises, it has strong political support behind it to make it happen."

Property specialists are due to work with the remaining government departments to find surplus sites for the other 39,000 needed to meet the target.

There is also an advisory group led by Berkeley Group chairman Tony Pidgley to advise Whitehall on how to bring sites "which face infrastructure, planning or site mitigation challenges" into use for development.

Later this year, the Government Property Unit intends to publish data on "almost all government land and property holdings" in England.

This ties in with a sort of do-it-yourself option, which can be used by builders to access land that is developable and owned by the public but not on any department's list of land to sell.

Under the Public Request to Order Disposal mechanism, anyone can send a request to the Department for Communities and Local Government setting out why they think a site is under-used by the public sector, with no clear plans for any alternative use, and why the land should be sold to bring it back into use.

Despite all this activity, building 100,000 homes by 2015 could be a tall order, particularly if rows about who pays for infrastructure, or about grants of planning permission, hold things up.

When he announced the sites, Shapps said: "I'm delighted that government departments have quickly taken up the ambitious challenge to release land with capacity for over 50,000 new homes, and that property specialists will continue to work with these departments to make sure that no stone is left unturned."

"I will look to ensure that as much of this public land as possible is available under our innovative 'build now; pay later' model - helping get developers on site and laying the foundations for these homes as quickly as possible."

That sounds like some serious political support for housebuilding. Three years from now we will know if it has worked.