Government appointed appeals Inspector B.J.Sims, in his report on plans for 220 dwellings on a greenfield site on the edge of Swindon recognises the council’s disquiet but says the contributions offered by the developer are the most that can (be) brought forward on the agreed evidence of viability.
Deciding an appeal for housing in the open countryside for this reason shows why the English housing market is hopelessly broken.
Remember the value of agricultural land in agricultural use, without planning consent for any other use is, for convenience say £10,000 per acre. With consent for housing at average suburban densities, (without the addition of on and off site services and infrastructure) the value of the same land (depends upon its actual location and likely sale price of the finished houses) could easily be £1,000,000 per acre. It is often far more; millions per acre. Looks puzzling to say development on land which has increased in value by 100 times as a result of the planning consent is not viable if required developers infrastructure contributions are higher than the developer offers. But from their point of view claims the project is not viable may be correct. A common response by developers if consent is refused is to wait, either until local policies change, or there is a change of government, or house prices race ahead again so land values-which are highly sensitive to house sale prices-rocket, yes rocket up once again to new record levels. Experience shows one of these will happen.
Burdening existing, allocated housing land with unexpected costs is wrong, and perceived by most participants in the industry as unfair. They are a powerful lobby. So resistance to last minute extras is widespread. The oft-ignored fact is the open market value of the land today, with an allocation for housing is already sky-high. The market knows the land will soon be developed and values it on this assumption. Put differently hope value has driven up open market value. Removing some of this hope value at the last moment, by the imposition of new costs is often seen by the development sector as asset confiscation by the state which is contrary to the English way. There is a lot of truth in this viewpoint. How would you feel?
If, say 15 years ago, in the local council had publicly made clear that housing land releases in this particular designated area would carry, for example an off site infrastructure burden of 50% of the house sale price, today’s open market value of the same land with consent to build would be far lower, indeed massively different. Unfortunately local councils do not plan housing land release policies 10-50 years ahead. If they did their local community would see a lot of benefits, and advantages in welcoming new housing.
It is a tragedy for communities and future generations to know most of the value of building land, created by the community will not go back to the community. Reversing this crazy reality is possible. But it cannot be done overnight. To do so would disrupt reasonable expectations, and encounter wide resistance. Delivering the policy changes needed with a 10/20 year long transistion and cross-party support, would remove the housing land supply blockage at little or no cost to the government.
Ian Campbell
16 November 2022
