Budget 2021 analysis: Cheffins’ reaction to funding to develop brownfield sites for homes
In his Budget 2021 speech, Chancellor Rishi Sunak unveiled £24billion earmarked for housing, with £11.5billion for up to 180,000 affordable homes, and brownfield sites targeted for development.
Philip Woolner, managing partner at Cheffins, said funding to develop brownfield sites is a “savvy move” but that “the proof will be in the pudding” as to whether 180,000 new affordable homes is enough to make an impact on the housing shortage.
He said: “The Chancellor’s pledge of almost £2bn-worth of funding for development of brownfield sites is a savvy move from the government and is welcomed in its mission to help build out neglected potential sites across the country. With the ability to ‘unlock one million new homes,’ the funding will work in a two-pronged approach in both helping to create additional housing which is so crucially needed, whilst also protecting the greenbelt.
“As brownfield sites are often in locations where demand for housing is lower or economic growth is weaker in comparison to other parts of the country, it can often be difficult for developers to justify building these out, particularly when assessed against easy-to-develop greenfield sites in high demand locations. For developers, brownfield sites which frequently come with additional complications, higher costs and potential contamination issues can be a rather unattractive proposition. Hopefully this injection of cash from the government ought to encourage developers to take on these sites which have been calling out for rejuvenation or to get cracking with building out the sites which have already been banked by many of the national house builders.
“The results of building out brownfield can be spectacular, for example at the Queen Elizabeth Olympic Park or the Gasholders site at King’s Cross, and they can bring huge economic and social benefits to a given area. Finally the government has seen the potential for many of these sites across the UK and has been willing to help ensure that it is still within house builders’ interests to make use of these types of areas, instead of setting vote-getting house building targets to be achieved at random, spoiling much of the countryside in the process.”
But Mr Woolner said there would have to be development on the green belt too if the government was to meet its housing targets, particularly in London and the south-east.
He said: “It also must be remembered that whilst it would be great to have these sites cleaned up with rows of shiny new properties, there will still need to be a significant level of green belt development in the coming months if the government is going to meet its housing targets, particularly in London and the congested south-east. And the important element here is the delivery of green, affordable housing, which will allow the government to work towards its net zero carbon goals, whilst also addressing the housing shortage.
“Affordability continues to be a major issue for vast swathes of the population and whilst the government’s aim to build an additional 300,000 homes per year for the next five years is all very laudable, these need to have a large proportion offered at affordable price points in order to help the millions still struggling to get onto the property ladder. Thankfully the Chancellor’s announcement of a dedicated £11.5billion towards solely affordable housing ought to help this, however the proof will be in the pudding as to whether 180,000 new affordable homes is enough to really make an impact on this perennial problem which successive governments have repeatedly tried to tackle."
He concluded: “These are muddy waters ahead and the government will need to review both its housing targets and its changes to the planning system regularly in order to navigate them.”
Mr Sunak also announced £5billion to remove dangerous cladding from high rise buildings, partially funded by the residential property developers tax to be levied on developers with profits of more than £25million at a rate of four per cent.