Government Policy Changes: New Opportunities for Property Development Finance?
An £80m fund to boost the regeneration of over 100 towns in England has been announced by the communities secretary, Robert Jenrick. The development funding is available for immediate investment and is designed for projects such as pop-up business spaces, green spaces, and community hubs.
The funding is part of the overall £3.6bn Towns Fund which was announced by the Government in 2019, with the intention to level up prosperity across the country. It has become even more vital in the wake of the coronavirus lockdown, which has had a severe impact on local communities.
New opportunities have also been opened up by the recently extended permitted development rights (PDR). This refers to the deregulation of the planning laws which were announced in July 2020, with the intention of cutting through red tape. The aim is to allow more affordable quality homes to be built in a quicker timeframe.
The reforms will see all land in England sectioned into three areas: ‘growth’, which will have automatic planning permission, ‘renewal’, with permission with basic checks, or ‘protection’, which will preserve greenbelt land. It is thought the rule changes have already led to the development of 60,000 new homes.
Property developers and finance companies have naturally welcomed the reforms, which also allow for a range of building types to be converted into homes without planning permission.
However, many groups, from environmentalists to architects, have raised strong objections. They fear the reforms will lead to a proliferation of poor quality ‘rabbit hutch’ homes, which will exacerbate housing problems in the long run, and blight towns and cities with eyesores.
In recent discussions, architects have urged property developers to think beyond the standpoint of financial return, and use designs that work on social and environmental levels. Property lawyers also warned developers to beware of potential legal challenges to their ventures.