Lawyers React To Chancellor’s Emphasis On Property

By Rob Dixon

Commercial property experts at Irwin Mitchell have warned that while the Budget’s focus on helping more people get on the housing ladder will be broadly welcomed, some questions remain over just how easy it will be for builders to commence new projects to boost supply.

In his speech to the House of Commons yesterday (March 21st), Chancellor George Osborne outlined how housing was a key part of his plans for economic growth, with financial support unveiled to help people both get on and move up the property ladder.

It is hoped that the move will play a key role in providing support to the property sector as a whole in continuing difficult economic conditions, ultimately ensuring that property buyers and housebuilders benefit.

Commenting on the plans, Thomas Hall, a Partner in Irwin Mitchell’s Real Estate team, said: “Through my work in relation to greenfield residential development in recent years, I am well aware of the difficulties the UK construction industry and the housebuilding sector have suffered in recent years.

“It must be hoped that the announcement will go beyond stimulating new builds and provide benefits to the residential property market as a whole.

“However, it is also important that the possible risk of a short term housing price bubble resulting from this is kept in mind and it will be interesting to see how the market reacts.”

Oliver Martin, a Partner and specialist in planning at Irwin Mitchell, said a crucial question will be whether the existing planning system would be able to support the housing plans.

He outlined: “We have seen a number of decisions by the Secretary of State where residential development has been permitted, against the wishes of the local authorities, in circumstances where the local authorities have been unable to demonstrate a five-year housing land supply.

“Such decisions, and the National Planning Policy Framework coming into force on March 27th, should assist house builders in securing planning permissions.

“However, an increasing problem may be the viability of residential schemes given the imposition of the community infrastructure levy in more areas across the country. Some of the rates for residential development are such that they may deter developers from implementing consents.

“The move to zero carbon homes in 2016 is an additional threat to the viability of residential schemes in the future.

“The Chancellor also announced consultation on introducing further flexibility in the planning system to facilitate changes in use from retail to residential. The principle may be welcomed but there will be concern that the Government will face problems similar to those arising from its reforms allowing change of use from office to residential.

“For example, the Government has been faced with 30 out of 33 of the London boroughs and seven out of the eight core cities seeking an exemption from the application of permitted development changes from office to residential.”

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