Developers shying away from London

London is becoming less attractive for developers due to the complexity of the planning regime.

This was the message at a Movers and Shakers event last week (watch more highlights below) debating how to boost the level of a ordable housing in the capital.

“London has always had it easy because people have always wanted to come here, but it is getting increasingly di cult,” said panellist Sir Edward Lister, chairman of the Homes and Communities Agency.

“Outside London, people are pushing through planning in weeks. They aren’t having these protracted arguments and things are being done fast.”

Fellow panellist Marc Vlessing, chief executive of London affordable housing developer Pocket, described getting a first scheme off the ground in the capital as “very, very hard work”.

Vlessing said that Pocket had managed to deliver successful schemes and built up capital, but that the planning regime had made it di cult for his company to establish itself.

“You’ve got a planning system that favours the big. If you’ve got volume, you can cut through that red tape, but if you’re a sole trader with one site, if you don’t get that off the ground, you never move on,” he said, adding that dealing with boroughs’ differing agendas made negotiating the system even more challenging.

“We are now operating in 16 local authorities and it does chew up an awful lot of time to get through all these di erent political and planning environments,” Vlessing said.

More direct impact

Outside the capital, Lister said that some areas needed to be clearer about their housing needs so developers knew where to target.

“Parts of the country have no idea what their housing assessment is; they don’t have a local plan,” he said. “That means developers don’t know where to go.”

On housing and challenge: Eddie Lister says London is getting difficult @MoversShakersUK A good thing for rest of UK; ppl look elsewhere

— Patricia Brown (@patricialondon) July 6, 2017

Reza Merchant, the founder of coliving developer The Collective, added that local government had a more direct impact than central government on residential development.

“Local government has all the power we need to allow us to deliver what we want to deliver,” he said. “We saw the [London] mayoral election as having a bigger impact on us than Brexit.”

Pessimistic approach

However, Merchant said that the public sector in the UK had a more “pessimistic approach” to new forms of housing such as co-living.

“[In the UK], we’ve had to ght to get people to understand what we do,” he said. “But when we go across the pond, people are really welcoming to new ideas and new solutions.”

The panel also discussed the central government stance on development and agreed that contrary to what some experts have forecast, the environment was likely to be fairly benign.

Marc Vlessing CEO of Pocket says “We need to change the housing sector culturally. Public & private partnership a must” @MoversShakersUK

— 26 Letters PR (@26LettersPR) July 6, 2017

The lack of a parliamentary majority could mean an end to the kind of radical policies that were implemented under the last Conservative government, such as starter homes, Help to Buy and the extension of Right to Buy to housing association tenants.

“They are going to have to do things without legislation,” Lister said. “That means we’re going to have fewer swings and it will be a bit more stable than it has been.” Vlessing added that this could be what the industry needed.

“I don’t think this is a government that is going to have the bandwidth to come up with ‘Starter Homes II’, which might be a good thing,” he said. It seems that the lack of a strong and stable government may be no bad thing when it comes to housing – if the government supports development.

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