Agents Eye Column – October

14th October 2013

We’ve heard a little about what the Labour party are seeking to introduce if they came into power at the next election and speaking from a landowners perspective some of it doesn’t sound that great, particularly their call to effectively compulsory acquire land with planning consent if it’s not developed or mothballed.

I think they are completely out of touch with what is actually happening on the ground in the North. We have many sites that are allocated for development and only need a push over the line to get planning consent but the constraints imposed via the local planning authority, utility companies and highways are just holding up building. The whole process of planning is wrong, instead of saying “how can we pass this application”, they planners have an attitude of “what would refuse this application.” It seems that every quango organisation can have a say, and just speaking from experience, some of these organisations use the planning system as a political message and/or bring in their own personal prejudices to the outcome. Where is the impartiality?

But turning back to development, a big area of holdup is the capacity on most utility services, gas water, electric, sewage, road networks being full. Invariably developments are being used as a means to get better infrastructure in for the area, not just the development, saving the utility companies from such upgrades. What it needs is investment from government or most importantly to force the hand of the privately owned utility companies, to invest in their own networks. It boils my blood when they state that they spent x millions on infrastructure upgrade, in reality its just repairs to the existing system, not future proofing us for the next generation.

Utility upgrades, meeting planning obligations, new highways, all have to be funded from the development and it just means that the developer will have little left over to acquire the land in the first place. The reality is that unless there is significant value for the landowner, then why would they agree to sell their land in the first place? Deals struck 5 years ago, which is not long in development terms, are so far out of date on pricing, and the reality is that whereas a landowner may have been hoping to sell 1 acre and buy 5 with the proceeds, many are barely able to double their acreage just because the underlying agricultural value of the land has increased so much of late. Some reading this might not agree, but profit is not a dirty word and you can be guaranteed with the farming world, that the profit is always ploughed back into business expansion.

I would advise any landowner to proceed with caution with developers, don’t get tied up into long option agreements, put obligations and timescales in and be careful about price of the land being linked to “market value,” it is an unknown and could mean that the land is worth very little if you’re not careful.

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