In his Autumn Budget on Wednesday, Chancellor Rishi Sunak gave details of the Government’s investment in brownfield sites in the years to come.
The Government has confirmed it aims to build at least 160,000 homes on brownfield sites, following the launch last year of the ‘Planning for the Future‘ white paper, which vowed to divide England into ‘growth’ and ‘protected’ sites.
The chancellor announced that £1.8bn has been set aside to develop homes on waste land. £300m will be given to metro mayors and councils to free up smaller brownfield sites for housing. Infrastructure, including transport links, schools and community spaces, will all be given extra funding and particular attention paid to energy-efficient housing.
Mr Sunak said the Government is creating a multi-year housing settlement totalling around £24bn to invest in housing and homeownership. This will comprise £11.5bn to construct around 180,000 new affordable homes and an additional £1.8bn, sufficient to make usable 1,500 hectares of brownfield land, to meet their commitment to invest £10bn in new housing and provide one million extra homes.
Brownfield sites create extra costs
Philip Woolner, Managing Partner at Cheffins, says the Chancellor’s pledge of almost £2bn-worth of funding for the development of brownfield sites is a wise move by the Government and their intention to build on neglected sites across England is welcomed.
With the promise to provide one million new homes, the funding will use a two-pronged approach to help create the additional housing that is so badly needed while protecting the greenbelt.
It can often be a hard call for developers to justify building on brownfield sites, he says, as they are often located where housing demand is lower or economic growth weaker compared to other parts of the country.
Brownfield sites, he adds, also often come with issues such as contamination, which involve greater costs and can be a deterrent. But this investment by the Government should encourage SMEs to develop these sites, which are crying out for improvement, or build on the sites already banked by many national housebuilding companies.
However, Nicky Sanderson, CEO of Audley Group, comments that the chancellor’s statement lacks detail, such as which types of houses are planned. The problem, as he sees it, is not that there are too few houses but that too many are under-occupied with millions of surplus bedrooms across the UK, many owned by people who would like to downsize but lack the means to do so.
The Government’s focus, he believes, should shift to specialist housing, so that freeing up homes takes the pressure off stretched care services.
Call for changes to planning system
Paul Smith, MD of the Strategic Land Group, argues that the extra costs involved in building new homes on brownfield sites often result in infrastructure improvements, such as new schools and parks, being sacrificed to make development financially viable. Yet Smith believes the largest obstacle to building sufficient homes is the planning system.
The high costs and unpredictability characteristic of the current planning system militate against many types of schemes being realised, but especially brownfield sites.
The smaller gain from change of use from existing to residential development value, combined with the reluctance of many councils to allow sites to be redeveloped unless they have been vacant for a number of years, means that it’s not worth the expense and risk of failure to apply for planning permission for new homes, even on brownfield sites that are highly suitable.
Smith concludes that without meaningful changes to the planning system, the public is unlikely to see new homes built on brownfield sites in significant numbers, which is regrettable because the economic benefits of doing so would dwarf every other announcement made in the budget.