Penningtons Manches welcomes LCCI recommendations for making the most of London's public sector land

Posted: 27/05/2015

The London Chamber of Commerce and Industry (LCCI) has published a report on alleviating the housing crisis in the capital. Entitled Unlocking London’s Housing Potential, the LCCI suggests six measures which could help.

London’s chronic undersupply of homes, resulting in house price rises that continually outstrip average wage increases, is well known. In May 2014, LCCI published Getting our House in Order, a report which focused on two key principles to increasing housing supply in London - the need for more land for development and for more builders to deliver homes.

In February 2015, the Government announced that it would provide £1 million of annual funding to establish a London Land Commission to support the development of 400,000 homes by 2025 on brownfield and public land. It is estimated that the Greater London Authority (GLA) assets alone could accommodate at least 100,000 new homes in the capital.

LCCI received just seven responses to its Freedom of Information (FOI) requests to 32 London local authorities to quantify their amount of surplus brownfield land, a result strongly indicating that the first priority is to identify land suitable for development.

Encouraging small developers into the market

Delivering housing on these sites – once identified - requires efficient and transparent disposal mechanisms. Large house builders and mechanisms such as the London Development Panel (LDP) cannot be expected to meet the dramatic increase in the rate of house building required by the Mayor of London’s Housing Strategy alone.

Predominant barriers to entry for smaller developers in the past have been the shortage of available sites, lack of transparency in ownership of land, and the time and resources required to secure planning permission. Improved knowledge of appropriately-sized and publicly-owned sites available for development through the London Land Commission would entice more small developers to enter the house building market in the capital.

Other recommendations targeted at small builders include deferring payment for land acquired from public ownership until after the homes have gone to market. Local authorities should allow developers of sites under 50 units to defer payment of the Community Infrastructure Levy (CIL) until the homes have gone to market.

LCCI recommendations

LCCI suggest the following measures to help alleviate London’s housing crisis:

• The Government should honour the commitment of at least £1m of annual funding for the London Land Commission and include it in spending plans.
• Government responsibility for the London Land Commission should sit primarily with the Minister for Housing, including the Minister sitting on the board of the Commission itself and having the power to ensure relevant government departments comply with the process.
• The Government should devolve the task of disposing of government department land assets in London to the Greater London Authority.
• London local authorities should be duty bound to integrate their data fully with the London Land Commission and identify a single department responsible for information on publicly held land.
• London local authorities should work alongside bodies such as LCCI in bringing together borough leaders, planning officers and small developers to investigate the capacity and terms of reference of a Small Developers Panel, which could operate either at a pan-London or sub-regional level.
• London local authorities which excel in recording and sharing information on public land, as well as demonstrating efficiency in maximising the value of land, should be awarded greater fiscal freedoms as an incentive - for example, in the lifting of the HRA cap on borrowing.

Commenting on the recommendations, Martin Codd, head of the property entrepreneurs group at Penningtons Manches, said: “London is in crisis and the lack of affordable housing must be tackled as a matter of urgency as swathes of key workers, so essential for the running of our  great global city, are being driven out of London and being forced to commute from ever greater distances. Owner occupation is no longer an aspiration but an impossible dream to many of the younger generation.

“More brownfield sites need to be identified and developed, with the new housing being built by smaller and more nimble-footed developers and builders bringing their product to the market. The LCCI's proposals have much to commend them and I hope the new Government adopts them in full.”

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