There’s been a few interesting posts this week on Housebuilding. Firstly there’s the directive that The Government will step in and ensure that Local Authorities do grant Planning Permission to reduce the shortfall of land release in their Statutory Authority Areas. Apparently the Government has awoken to the fact that some Authorities are not releasing land or granting approvals simply because they wish to maintain the Greenbelt Policies. There is also the directive that the Government will seek compulsory purchase orders on land that is being banked by large house builders. To be fair in my 15years as an Architect I have heard this on several occasions and throughout several variations.
So, what can really be done? Well I genuinely think that the small house builder should be afforded less hurdles to deliver smaller housing projects. This comes today after being advised that a project we are looking at could have in excess of £10,000 contributions per unit. This also comes today after a conversation with a fellow Architect who suggested that his Client is Currently being asked to pay in excess of £18,000 per unit and we all know that the National House Builders’ are NOT paying these large contributions but have in fact agreed a lesser contribution based on the volume of houses the bring to the market. This may be fair I hear you say but these contributions can amount to 1/3 of a Small Developer’s profits and actually can actually kill the project with lenders unlikely to get involved where anticipated profits are less than 25% of the Gross Development Value.
Here’s the other thing! As a Property Developer and Property Mentor myself I am frequently asked to clarify why Council Contributions will be. The reality is having dealt with a few Authorities here in Scotland is that some Planning Departments will offer this advice upfront and others will invite a Planning Application prior to releasing the Contribution figures. This is the reality of the matter.
So who is then responsible for Housebuilding in the UK? Is it the House Builder or is it the Government. Personally I believe that it us up to you, me and ourselves to deliver these products to the market. I don’t believe in the philosophy that the Government should take the brunt of the burden. I believe in entrepreneurship. Succeeding and failing is all part of business and part of the Development Game, although I clearly wish you more success than failure but hey the reality is that failure teaches us. Small mistakes are okay. Perfection is hardly possible and so long as we are procuring homes that meet current standards then all is well. In today’s Construction World it’s hard to be 100% compliant but the systems and processes and checklists required through the Planning, Warrant and Financing stages are there to ensure that at the end of the day you are delivering an above average and acceptable product to the marketplace.
I am currently involved in my largest JV Venture and hey it’s challenging to pull together all the systems and procedures to grow a business particularly a House Building Business. At my Property Development Course last weekend I was training on the 7 STEPS to Property Development and towards the end of the weekend I was asked to quantify how systemised our JV Venture was. It was an interesting question. Right?
Well, I responded honestly and said that it was, in my opinion, about 75% complete ie with some improvements in the business we could definitely increase things to say 95% which would be an ideal. 100% is just a target which should not be aimed for. Aim for excellence and not perfection, as I see it.
Anyway, I look forward to ‘watching this space’. Perhaps you have some view on who is Responsible? I would be happy to hear your thoughts.