9165 - BM Outlook 2022 R6 - Flipbook - Page 26
Housebuilding is big business, and
with the government keen to see an
increased number of homes built
across the region, landowners with
suitable sites can take advantage of
a lucrative form of diversification.
But while the returns from selling land for
housing can be impressive, the process
can be complex, with plenty of planning
obstacles to clear and negotiations to
conclude. It’s not for the fainthearted,
which is where expert advice from the
likes of Batcheller Monkhouse’s Oliver
Robinson becomes essential.
With the market for development sites
showing no signs of slowing down following
strong growth in 2021, Batcheller Monkhouse
has been helping a number of landowners
over the hurdles and across the finishing line.
“While our planning and development
teams work hard with clients to identify
potential sites, the process sometimes
begins when a landowner or farmer is
contacted by a housebuilder or land
promoter, told that their site has potential
for development and essentially asked to
‘sign here’,” said Oliver. “That’s the point at
which they come to us and ask for help.”
The continued growth in the residential
property market has helped to fuel the
rising demand for sites, although the price
paid for land has been partially offset by
rising building and material costs.
24 | Outlook
Competition for sites driving
up prices
“We are currently seeing a number
of national housebuilders looking to
replenish their pipelines of new sites,
especially as the process stalled during
the height of the pandemic,” said Oliver.
“Competition for new sites has led to a
highly competitive bidding process which
not only drives up prices but also leads
to a greater level of completions.
“Many housebuilders have set ambitious
targets for acquiring new land in the
South East. Redrow has launched a
new Southern Division, focusing on
Surrey and West Sussex, which aims to
construct 600 new homes a year. In the
past 12 months we have also sold sites to
Dandara, Persimmon, Taylor Wimpey and
Brookworth Homes and placed option land
– where developers agree to buy a site if
they can get planning permission – with
Bellway, Taylor Wimpey, Crest Nicholson
and Brookworth Homes.”
While Batcheller Monkhouse is willing
to recommend the use of an option
agreement in the right circumstances,
Oliver prefers to partner with a land
promoter, a company that will secure
planning permission and take on the costs
involved. This leaves the landowner able
to sell the site to the highest bidder on the
open market, usually for a better price.
Oliver Robinson
Nationally, 20% fewer
homes were granted
planning consent in 2021
compared with 2019,
while demand for housing
has continued to rise.
Partner,
Tunbridge Wells
Land promoters will
secure planning permission
and take on the costs
involved. This leaves the
landowner able to sell the
site to the highest bidder
on the open market,
usually for a better price.
The supply of land has been constrained
by a number of planning issues,
including the effects of the pandemic,
and new requirements to achieve water
or nitrate neutrality across parts of the
region. Nationally, 20% fewer homes
were granted planning consent in 2021
compared with 2019, while demand for
housing has continued to rise.
Another issue is that as planning
authorities are being pressed to hit
increasingly tough targets they are tending
to focus on larger sites – typically 500
units or more – which has caused a fall in
the number of permissions being granted
for sites for between 50 and 200 units,
recognised as the ‘sweet spot’ for the
majority of housebuilders.
Balancing act
“A number of planning authorities
are struggling to balance the need
for new homes with protecting the
environment,” said Oliver. “There are
planning embargos in East Kent because
of concerns about water neutrality in the
Stodmarsh catchment area and a similar
situation affecting Horsham, Crawley
and Chichester District Councils. An
application here can only be determined
if it can demonstrate water neutrality,
which means the water usage in the
supply area must not be increased by
the development.”
“This success has been the culmination
of many years of hard work during which
we have helped to guide the landowners
through the planning process while
negotiating partnerships with land
promoters to mitigate the risk to our
clients,” said Oliver.
While there are challenges, Batcheller
Monkhouse has had a lot of success over
the past 12 months and has sold six large
residential development sites which will
deliver 750 new homes in East and West
Sussex – with a combined land value of
more than £50m.
Planning & Development | 25