Author: Ann Pottinger

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More barns and shops to become homes says Planning Minister

Government approves positive step towards more flexible building conversions

Old BarnIn an effort to combat the nation’s ever increase housing shortage, the UK government has announced details of new permissions allowing the redevelopment of agricultural and retail properties.

Planning Minister Nick Boles stated thsi would make “better use of redundant or under-used agricultural buildings” thus reducing the threat of development in the countryside on green belt areas. The new law which has now come into effect, allows up to 450 sq m (4,850 sq ft) of buildings per farm to be redeveloped, with a maximum of three houses.

Alongside these plans, the government has also changed the laws so that agricultural buildings up to 500 sq on each farm can be converted into schools and nurseries. However, restrictions do stipulate that farmers would not be allowed to demolish cow sheds or outbuildings. Only to conversions or renovations would be permitted to preserve the history and authenticity of certain older structures.

Commercial properties could also get the treatment too

The government also confirmed that “under-used” shop premises may be changed into residential homes. This applies to retail spaces of 150 sq m or less. These permitted development changes will not apply however, in national parks, areas of conservation or of outstanding natural beauty.

With the high streets and back roads of many towns and cities losing small, local businesses in their droves, many once thriving retail premises are starting to find new occupant leases very difficult and thus, these once residential properties that were converted to cater for the small businesses operating within them may once again return to their roots.

With the size restrictions in place, it is clear that this new law is aimed at the smaller, non-commerically designed structures to return to their original purpose of purely residential use.

Protecting green belt areas

Activists have expressed real concern about a possible of a new wave of new barn conversions green belt areas in close proximity to cities, where housing shortages tends to be common.

In response to this, Nick Boles stated the government was “re-affirming green belt protection” and noted that “unmet housing need was unlikely to outweigh harm to the green belt”. In his statement, he also stressed the importance of bringing brownfield land back into use as much as possible.

However, The Campaign to Protect Rural England said it was very “concerned that allowing barn conversions without planning permission could do real damage” to the countryside.

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March sees UK housing demand outweigh supply

Gap between supply and demand remains extended according to Hometrack

English Terraced HousesFears of a growing housing market bubble have gathered pace this month as demand for homes continues to outstrip supply all across the UK. Although house price rises were recorded at 0.1% less than February 2014, the overall 0.6% rise in market values during March still shows a continued upward trend.

On average, home sellers are achieving 96.2% of the asking price, marking the highest rate seen in over a decade as buyers hunger to buy homes grows stronger. Staggeringly, London property is achieving an incredible 99.3% of the asking price and across every region of the UK, the figure is above 93%. All of this points to further price rises, according to a report recently published by Hometrack with the gap between supply and demand remaining extended, showing no signs of changing in the short term.

Should we be concerned?

Housing developers have stated that whilst more homes are being built, the industry is unlikely to meet government targets in the near future. Industry commentators also state that the sector’s failure to keep up with rising demand could drive prices up to unsustainable levels, triggering the daunting prospect of yet another price crash; leaving new homeowners in negative equity. Westminster is being urged from many quarters to take decisive action to ramp up supply with Government led housing schemes.

At present, the main concern is still London with the capital showing the biggest signs of a property bubble not seen in a generation. Whilst some analysts within the estate agency industry remain calm, others are concerned that any major downward events in London could have a devastating domino effect on the rest of the UK.

Homes and land owners still remain very skeptical and with the markets showing encouraging signs of growth and intense demand, many are still yet to be convinced to sell up and cash in.

Who or what is to blame?

Many have been quick to declare the Government’s Help to Buy scheme as the main culprit however, contrary to this sentiment, Richard Donnell, Director of Research at Hometrack, stated that overall sales supported by Help to Buy are ‘relatively small’ and ‘the real driver of higher house prices is record low mortgage rates and strong demand from first-time buyers and investors who have no property to sell, which is compounding scarcity. With average mortgage rates currently at 3 per cent or lower, compared to over 5 per cent before the downturn, households have seen a significant boost to buying power.’

So it seems apparent that the scale of house price increases in the coming months will depend on whether existing home owners and buyers will bid up the prices of homes, which could then lead to all sorts of inflated values.

However, the good news is, things could soon be about to change and the current mad rush could be down to new legislation about to come into force, which means lenders have to ensure that buyers can not only afford their mortgage repayments now, but also when interest rates eventually start to rise again. A hint of things to come no doubt.

The second half of the year may see a price correction but at present levels of demand, that may still not occur considering cash buyers and investors account for up to two fifths of property sales.

Recent official house price figures released by the Office for National Statistics showed property values rising at 6.8% annually – over five times as fast as the ONS wages measure, which is up by just 1.4%. In the year to January 2014, the average home went up £17,000 to £254,000, while wages rose by just a paltry £417.

Separate figures from the Land Registry recently showed house prices across England and Wales rose by 5.3% in the year to February 2014 but prices in London soared by a whopping 13.8%. With growth figures presently continuing on these levels, many do have reason to be concerned. But one thing is for sure, with demand as it is, it is most certainly a sellers market once again.

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Government land release scheme boosts affordable housing development

New approach gives much needed impetus to once stagnant market

Grand GatesAccording to leading industry bodies, a new government land-release scheme could significantly help increase the development of affordable housing across the UK.

Dubbed the government’s “right to contest” scheme, it allows the public to question the use of central government-owned land by submitting an application claiming that a site is potentially surplus to needs or is simply redundant, or more importantly, could be put to better use, with housing being the main argument.

What most people do not realise is that our government owns more than £330 billion of land and property across the UK. Independent studies suggest that the public purse holds up to 40 per cent of development-ready land and around 27 per cent of brownfield land suitable for new home builds.

Minister for the Cabinet Office, Francis Maude, who announced the scheme recently said “To help the country live within its means we need to use every bit of property we own effectively. Of course we will never sell our national treasures such as Downing Street or the British Museum, but there are hundreds of other properties across the country which are under-used or lying vacant.”

Along with the scheme, the government plans to launch a website allowing users to search and find suitable acquisitions, such as government-owned property and land.

Are we outgrowing ourselves?

This latest move just underscores the steep climb in demand which our country is under to find or build new homes. With suitable brownfield sites hard to come by, the Government is looking for ways to recycle and rejuvenate unused or outdated properties before taking to unpopular and devastating decision to open up green belt land for building. A decision which will be wholeheartedly unpopular throughout the country.

Here at Development Land for Sale, we have seen a significant increase in traffic to our website and more so, enquiries for developers and investors looking for suitable land for development. 2014 is certainly shaping up to be a growth year in this once flat sector; a change that has been a long time coming.

With hundreds of plots on offer in our database, we certainly agree that all brownfield options should be considered and explored before we start to cut up our countryside to make way for new homes. With a growing population year on year, politicians are coming under increasing pressure to deal with the increased demand for homes.

How they come up with a suitable or popular solution is yet to be determined.

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Will 2014 be a happy new year for property developers?

New UK home building up according to latest figures

1384332_52678652The latest figures from the National House Building Council state that over 34,000 new homes were registered during the last quarter of 2013; an increase of 30% compared to the 26,000 plus registrations seen in the same period the previous year.

Just this past November 2013, 11,409 homes were registered broken down into 8,000 + in the private sector and 3,000 + in the public sector, returning an increase of 20% on last November’s overall total of 9,533.

2014 set to be a strong year for house price growth in the south east

Average UK house prices increased by 4.4% over the course of 2013 and market growth is set to continue into 2014 with the strongest gains unsurprisingly set to be seen in the south east, according to latest analysis.

With demand from aspiring home buyers increasing and a continued lack of supply of houses on the market, this growth is set to continue well into the year as a whole.

Property website Home.co.uk predicts that London and the Home Counties will continue to outpace the rest of the UK’s housing growth this year. Using key data and trends from their ‘Home Asking Price Index’, analysts compiled a set of regional price forecasts, predicting the potential winners and losers in the twelve months.

They predict that marketing times will drop further as demand increases around the country and supply will continue to decrease, especially in London and the South East.

The North West, Yorkshire, Wales, Scotland and the North East’s price rises will still remain below the national rate of inflation with the ever-popular buy to let sector experiencing continued grow despite falling returns.

However, with the support of George Osborne’s Help to Buy scheme for home purchases below £600,000, house price growth has picked up pace to the point where some commentators have expressed genuine concerns of yet another property bubble being created.

Will the current growth last or will it eventually fall flat?

On the surface of things, it is not at all surprising that house sales are up on 2012 to mid-2013 levels as stamp duty exemption for first time buyers ended which encouraged new entrants onto the housing ladder. Other Government schemes such as Home Buy, Right to Buy and Funding for Lending are starting to have a big impact on the economy which is helping to gradually increase demand and of course, house prices.

With interest rates remaining at historically near zero levels, affordability will remain sound for existing mortgage holders and first-time buyers who can get finance however, some have concerns that when the inevitable rate rises do come along, trouble could be ahead.

What can’t be predicted is when the Bank of England governor Mark Carney finally decides to raise interest rates to help economic stimulus but what can be predicted is it has to happen eventually. With a 2015 generals election just over a year away, it is safe to predict a continuation of low interest rates for the foreseeable future to avoid rocking the boat.

The economy and politics go hand-in-hand so a solid prediction could be that 2014 is the year to take advantage of renewed confidence and get back into the markets whilst the going is good. 2015 will most likely be another positive year however, if rates do have any hint of being hiked, certain higher risk loan holders could suffer. Will that effect land or house prices? That all depends on the scale of the damage.

Market confidence is all about supply and demand!

House-building is starting to recover after the huge drop off in development post 2007. Although there’s plenty of positive signs of growth, the on-going lack of finance for large-scale development and inactivity caused by planning red tape continues to act as a drag on the building of new UK homes.

Whilst the level has begun to rise somewhat, it will still take quite some time for output to increase significantly and experts anticipate the level of completed housing developments will remain subdued over the next two years. In short, there are good opportunities for land development this year but making the right choices based on location, desirability and price are key factors moving forward.

We feel that 2014 is a year of opportunities but ones that must be chosen wisely. Confidence is starting to improve but we are still years away from the heady days of the late 90’s and early 2000’s.

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Land prices are going up – now’s the time to sell!

Confidence is returning so should you hold out or sell up?

Land values are going upThe value of residential UK development land rose in the third quarter of 2013 according to the latest Residential Development Land Index. Continuing the trend seen in the previous quarter, the average price of a greenfield development land site rose by 2.7%; more than doubling the rate of upward growth of Q2 which saw rises of around 1.2%.

To date, that returns an annual growth rate of around 4.3%; hugely increasing from a more modest annual growth rate figure seen in the last quarter of 1.8%.

Government stimulus or genuine confidence?

Due to the new Help To Buy Equity Loan scheme, around 15,000 new home reservations have been approved, with the bulk of the concentration of these being in the South East, outside of the central and Greater London areas. With growing commuter populations moving out to the more affordable areas adjacent to London, this comes as no surprise.

The increase also coincides with a key aspect of the National Planning Policy Framework (NPPF) in which many local authorities are busy establishing sites that are suitable in delivering sufficient levels of new housing development over the course of the next five to ten years. So taking into account both Government intervention and renewed confidence, one could argue that the two have gone hand-in-hand in returning market confidence but one fact is clear that these new stimulus schemes have been the catalyst for this dramatic change in fortunes.

It’s also no surprise to learn that this has resulted in a very active housebuilding and land selling market; with a hugely impressive 30% jump in planning applications for private dwellings over the course of the summer of 2013. So should you sell your land now or hold out for more?

Timing is everything

London is still the hotbed of property and land values, climbing 4.5 % in the third quarter, following an equally impressive increase of 4% the previous. London is certainly bucking the trends set around the rest of the UK. 2012 was a much slower year however, with increased stimulus coming from Westminster and renewed confidence in the real state sector, 2013 looks set to be the year the wheels started to turn once again, with developers and investors feeling far more confident about the year to come.

Land values will show an increase all over the UK early in 2014 no doubt but arguably, this upward trend will see a slow down eventually as development applications pull back and the slightly hyped stimulus scheme euphoria dies down. If there’s a time to start selling, now is it, as the peak of the stimulus will show a plateau sometime next year no doubt. Greedy land owners may argue that this climb has some way to go however, on past experience these upward curves always reach a sudden peak far quicker than most anticipated.

If you want to know what your development land is currently valued at, speak to our team and we’ll be happy to give you our professional opinion and discuss whether now is a good time for you to sell your development land.

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How to find your ideal development land plot

Avoiding the common and costly pitfalls!

Starting out on your search

313291_5522It’s everyone’s dream to build their own home on a beautiful plot with a great aspect, in idyllic surroundings yet close enough to common amenities and commercial centres, to avoid being too isolated. A house that has everything you’ve ever needed; can grow with your family and your ever changing demands. Who wouldn’t want that?

But locating the perfect site that will grant you all of these wishes, not to mention planning consent is never easy. In fact, it can be a very bumpy ride if one is not prepared!

When seeking out development plots these days, it is easier said than done to land the best plot (excuse the pun!). The best land has a tendency to be snapped up and whipped away by greedy developers at the blink of an eye and in many cases, they get the inside track before the everyday single home builder would even have an inkling that a plot was even on the market. It’s a tough and cruel business.

According the recent statistics, around 70% of land that comes onto the market is brownfield – land that was either owned or occupied by a previous permanent structure that has become vacant, unused or derelict and is not considered a reserve or detrimental to the environment if redeveloped. The remaining 30% is greenbelt – untouched, undeveloped land that could be owned by a wide range of individuals or bodies that may prove a worthwhile investment if the circumstances are right.

So where do I find development land?

There’s a whole range of options out there now and with the internet becoming an everyday part of our lives, whether on our phones, smart devices or what are now considered old fashioned PCs, we have a great deal of power at our fingertips. Still, some of the more traditional routes are still worth considering but here’s a few for starters:

Estate Agents

Yes, believe it or not but estate agents still do have a good number of quality plots on the market. Although they are largely in the business of marketing residential or commercial dwellings; on the odd occasion some agents do come across the odd plot of land that is worth a look.

Even if the agent doesn’t have any land for sale at the time, it’s always worth leaving your details with them, explaining that you are in the market for a development plot and to consider you if they are offered any in future. You’d be surprised how much an approach like this can open doors.

Many estate agents are very well connected with property developers, building trades and investors so your intent to buy may just get heard by the right people just when you least expect it. So never write off this option when you start your search.

Land Agents

Land agents should naturally be your first point of contact. As they deal solely in land plots, with or without planning consent, they will be the best to advise and guide you on the processes. However, land agents are few and far between and aren’t as commonplace on the high street as their estate agent counterparts.

So if you do find one, make sure you register with them and tell them about your plans. We at Development Land for Sale would also be happy to work with you so please ensure you speak to us if you need an agent.

Online

Once you’ve checked all of the normal boxes, then it’s time to get online!

There’s a whole minefield of sites out there offering land and plot search engines. Some require a registration process and in some instances, a fee to join to review plots on offer. When choosing which websites you want to use as your basis to search, remember to check their terms and conditions.

Some websites have some very draconian terms that require unfair and at times, inflated fees when buying land through their system. Most reputable sites should show contact details so that you can speak to an agent via phone or email and ask questions first. If you are asked to register and pay money before even being allowed any form of access to a website then think carefully about whether this is the site for you!

The best sites should include all the necessary basic details of the plots for sale and with just a simple registration form, then allow access to further details. Sites do this mostly to prevent time wasters as land plots are fought over hard and at times it can get ugly!

Private sellers like using land for sale sites as they often don’t have to pay to advertise. It is not uncommon for land buyers to pay fees to access land details, usually payable on purchase of the plot.

Auctions

If done right, auctions can be a great place to grab a good plot of land. Usually advertised in local publications, auctioned land is often due to bankruptcy or repossession.

However, like any auction, it is easy to get lost in the moment and end up overbidding for something that is far less in value. Land auctions also carry a lot of risk as many are sold as seen which can lead to disaster. If you’re in any doubt, take someone along with you who has experience of land and property auctions otherwise, it might be best to avoid these scenarios to prevent making a huge financial mistake!

Take your time and choose wisely

Whichever route you decide to take, it is always best to have a set list of criteria that the land must meet. Land purchases can have just as many if not more complications that a property purchase due to covenants and planning consent.

Anyone in the market to buy land should always research local and national laws on any plans you have before taking the plunge as a purchase can lead to disaster. If you need advice on the processes of buying land and how best to find a perfect land plot, why not speak to our team?

With our experience and specialist knowledge, we are sure we can help you on the right path to a successful and stress free purchase!

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Unwanted Land – What Can I Do With It?

(LDP) LOCAL DEVELOPMENT PLAN

Means it is possible to build on the land

Local councils consider the development envelope every 5 or 10 years,
if you think your land might be suitable for commercial or residential
development you should ask the council to include it in the LDP (local
development plan). Once it is included in the LDP it will be
attractive to builders as they know they can build on the land. They
will then have to convince the planners that their scheme will be acceptable.
The planning process what can I do once I have planning consent

 

How do I gain planning consent on my land?

There are several options

Once your land is in the LDP, you need to decide whether to build on
it yourself or sell it to a developer.  If you wish to build yourself
it is important to ask a planning consultant to help you.  If you
would rather sell to a developer you can use a Land Agent to help,
some of these offer a free service to land owners.

 

The planning process

What to do

If you wish to build yourself, find an established Planning Consultant
who will discuss your site with the local planners at the council and
then draw up and submit drawings for approval.

 

What is an Option Agreement?

My land has no planning consent

If you think your land has development potential a builder or investor
might be interested to get the planning consent, this will be done at
their expense. You will be asked to enter into a contract to sell the
land if suitable consent can be obtained. You will not be able to sell
the land to anyone else during the period of the contract.

 

Once planning consent has been granted how long does it last?

This varies from one council to another

Usually 3 or 5 years but once you have started to build the planning
consent does not lapse