4 minute read
Sigma Strategic Land (SSL) is delighted to be in conversation today with Bob Hilder, Co-Owner & Strategic Land Director at Land & Brand New Homes based in Worthing, West Sussex.
Bob is a specialist land agent with over 30 years’ residential property experience and specialises in the strategic land acquisition of sites as well as their disposal. He routinely advises clients on sites throughout Sussex, Surrey and Hampshire.
Bob has had extensive experience in identifying the next hot prospect for both immediate and strategic land opportunities. Consequently, housing delivery throughout his career has been hugely present and pressing as an issue. We sat down with Bob to learn more.
1) Sigma Strategic Land (SSL) is located in Horsham within the south-east of England. It is fair to say that housing need in the south-east is very acute, likely one of the most severe in the country. How have you viewed the past 12 months of the land buying and housing market?
Despite lockdown, developers’ thirst for land has continued unabated. As we are all aware, there is a lack of land supply; this creates increased demand from developers whose business objectives are those SMART results that companies hope to maintain as their organization grows. A business also has to provide dividends to shareholders. Increased demand for land for residential development provides increased value to the Landowner’s benefit.
2) Assessing housing need in all its different forms is a significant challenge and one that goes to the heart of ensuring proportionate housing delivery. Do you think the current system of setting Local Authorities an Objectively Assessed Housing Need (OAHN) and establishing a 5 year supply of housing is accurately capturing the target need?
Projecting housing need in its simplest terms looks fairly straightforward:
Step 1 – Calculate projected household growth
Step 2 – Adjust the annual growth figure, based on how affordable it is to buy a house in the area, by looking at the area’s ‘affordability ratio’
Step 3 - A cap may be applied to limit the increase in housing need that an LPA (Local Planning Authority) might face, depending on the strategic housing policies it has already adopted.
However Local Authorities try to assess housing need, it will never be right nor wrong due to the individual needs of locations. Local Plans often define areas inside the plan boundary, within or outside of which special policies apply e.g. city centres. Plan-wide policies and site-specific proposals are in my estimation needed to deal with a variety of issues involved in the planning process.
3) House build-out rates are often targeted as contributing to stalling housing delivery. In June last year, the Housing, Communities and Local Government Committee in the House of Commons discussed ‘The Future of the Planning System in England’. This report considered the Government’s proposed reforms to the planning system announced back in August 2020. Paragraph 129 of this report states that a combination of ‘carrots and sticks’ are needed to speed up the process of completing planning permissions. One ‘stick’ idea is to impose a time limit of 18 months following the discharge of planning conditions for work to commence on site.
Do you think that housing build-out rates are a key problem to housing delivery and do you think that a combination of ‘carrot and stick’ is the right approach?
Local authorities need professional teams to deal with planning applications. There is, too often, a lack of competent teams with a commercial head on their shoulders when it comes to the delivery of decisions.
It is my belief that if the professional officer recommends approval there has to be a very good reason for the application to be refused. So many times, an appeal is won with costs against the local authority due to applications being refused for political reasons. This is especially prevalent when local elections are nigh.
If we’re considering ‘carrot and stick’ for housing build-out rates, then I believe the same should apply to planning applications. After all, the local authorities benefit in many ways from new housing – CILs, Council Tax receipts etc.
If the reserved matter has been approved, then a start on site roads and services should be achievable within 12 months.
Nevertheless, with a major shortage of materials currently and dare I say skilled construction workers available, then naturally delivery is bound to be affected.
4) Do you think there should be more stick and less carrot for Local Authorities who fail to progress with their plan-making and deliver enough homes? Do you think that the most severe deterrents arising from the Housing Delivery Test in applying a 20% buffer to an Authority’s OAN or even the Presumption for sustainable development will assist in historic under-delivery?
It comes as no surprise to me that reports of 55 local planning authorities (LPAs) in England are to face the most severe penalties following the latest Housing Delivery Test (HDT) results. These were published on 19 January 2021 by the Ministry of Housing, Communities and Local Government (MHCLG).
These councils failed to deliver 75% of their three-year housing target during 2020 and consequently now face ‘the presumption in favour of sustainable development’. As a result, more speculative planning applications for non-allocated sites are likely to be submitted and potentially approved in these areas.
My experience is that so many Local Authorities fudge their Local Plan. The ‘Call for Sites’ system gives Local Authorities ample time to allocate suitable sites.
I’m sure in part that may be correct. However, each Local Authority has its issues and so many times currently a lack of professional officers is the main reason for delay.
5) Environmental caselaw has had significant impacts on housing delivery. Within southern England for example, housing delivery has been historically severely impacted by the Ashdown Forest, nitrate neutrality across the Solent region and now groundwater neutrality. How do you view such constraints within the context of housing need and delivery?
It is right that we take a holistic view of housing to preserve the nature of our counties for the enjoyment of its residents and visits. However, I would argue that Natural England and ecologists seem to have more influence and power than the planning officers themselves.
So many times there are reasoned solutions for taking a particular course of action. For example regarding water neutrality – repairing water leaks in the system would be more beneficial as well as educating the general public on how to conserve our water, particularly in the wake of global warming!
6) One of the aims laid out in the Planning White Paper has been to look at ways of helping all sectors of housebuilding from the small and self-builders who wish to build innovatively and through to SME developers. The Federation of Master Builders’ members has estimated that the SME sector would build 12,000 homes in 2021, but with support and reforms to the planning system they could raise this to 65,000 homes by 2025. It is therefore clear that SMEs play an important role in housing delivery and hold considerable potential in this regard.
Do you see any distinguishing role between SME developers compared to other sectors of housebuilding?
I am aware of several sites within our area of operation that have a ‘self-build element’ or self-build to the site in its entirety. It appears to me that the main developer/contractor ends up building the units in any event. Self-build in so many occasions is a dream for many who do not have the practical experience to ‘self-build’.
7) What do you see as being some of the main challenges to the sale of land and its disposal at the present time?
In the main, from the technical perspective, Local Plans and Site Allocation decisions make up 90% of the challenges.
And from a Landowner’s perspective, the length of time it takes to obtain planning permission on a strategic site can become insurmountable. They will come across legal challenges, objections from neighbours, and be faced with many stressful decisions – sometimes amongst family members.
I’ve dealt with many hundreds of landowners in my 30 years as a strategic land buyer. Landowners have a right to know what kind of agreement they’re getting involved with, the costs, the various stakeholders and the many questions and not always straightforward answers between landowner and buyers.
I try to make the procedure simple but there are always tripwires. Strategic land sites can take upward of 10 years to come to fruition. Therefore getting to know your landowner at the outset and making the right preparations well in advance is critical.
Here are my 7 steps to a successful land sale:
- Build Trust:
Ensure that all family members/stakeholders understand the process and time constraints/undertaking by explaining how the process works and being on hand to answer any questions that arise – throughout the long journey.
- Prepare
Prepare concise Heads of Terms, Agreements, standard replies to enquiries and searches so that the Landowner, his Solicitor and the buyers and their Solicitor are kept informed throughout. NB Most importantly, make sure the Solicitors have legal and practical experience in land buying/disposal.
- Land Registry Title / Boundary Issues
Landowners should have registered title to the property, available at Land Registry.
However, issues with titles, such as ransom strips or access ways not being included in the title plan or register, and third-party issues such as rights of way or boundary disputes need to be dealt with early on.
Landowners or their Agent should always make sure the property being sold matches the Land Registry title.
- Overage / Clawback
If an overage condition is proposed or is pre-existing, this should be made absolutely clear at the outset.
It is also important to agree the “trigger” event (usually the grant of planning consent, sale of the site or implementation of the planning consent) that will dictate when the overage/uplift becomes payable.
- Preparatory work
All relevant ground, ecological, environmental surveys must be carried out at an appropriate time so that an offer can be based on findings.
- Financials
A landowner should consult his Solicitor and Accountant on issues such as VAT, tax, stamp duty in advance of the sale.
- Identity and Proof of Address of Landowners & Buyers
As agents, we must verify the vendor and seller in a transaction following the UK Anti-Money Laundering and Counter-Terrorist Financing legislation which came into effect in 2017.
8) Very helpful tips, thank you! Sigma Strategic Land (SSL) is also keen to understand the extent to which the planning system is responsible for a slowdown in housing delivery? Do you think that all the blame should be placed at its door, or is the problem more wide-ranging than this?
If you speak to 90% of development companies at present, the main topic of conversation is town planning and the delay in consents being granted.
9) Land & Brand New Homes is a specialist business assisting in the role of housing delivery. What sort of services do you offer in this respect?
Land & Brand New Homes are premier land agents in East and West Sussex, Surrey and across the South East. We have been using our considerable property expertise to help unlock the residential development potential of land since 1991.
Our specialist team works with both landowners keen to sell their land and house builders looking to buy development land for sale, providing advice, brokerage and consultancy.
Land & Brand New Homes have an enviable track record in residential development and routinely work with well-known local, regional and national developers, focusing on land promotion. As land agents in West Sussex, East Sussex and beyond, we liaise with local councils, landowners, property developers and trusts, and have delivered successful projects in strategic and brownfield residential redevelopment and retirement living.
10) SSL very much appreciates your time and commitment to take part in our Q&A. To end, what do you see as being the most promising aspect of accelerating housing delivery in the foreseeable future?
Granting planning consents!
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