The government’s new brownfield register is intended to help councils develop on brownfield sites – but how can contractors and developers best make use of it?
The government’s new brownfield register and its plans to pump £2bn into building on brownfield land show that regeneration, rather than opening up the green belt for development, will continue to be its priority.
What sort of opportunities will this approach have for contractors? How can they work with clients to improve efficiency and make brownfield land more attractive to developers and funders?
The government first announced it would launch its brownfield register in March this year with 73 councils across England picked to pilot the scheme by creating their own individual registers.
The policy is intended to help government gather information on brownfield land across England to encourage development and inform future government policy.
Perhaps most importantly for contractors and developers, the government will enable planning permission in principle for housing developments on sites listed in the pilot brownfield registers. This was introduced as part of the government’s Housing and Planning Bill, which came into force in May this year.
The government has also said that it wanted to have planning permission in place on 90 per cent of suitable brownfield land by 2020, with the registers helping to benchmark its progress.
How does the register work?
Since then, the government has reaffirmed its stance on brownfield land, with communities secretary Sajid Javid earmarking £2bn of funding for a new Accelerated Construction fund, which is aimed at speeding the delivery of new homes on publicly owned brownfield land.
In theory, these two measures should work hand in hand – sites listed on brownfield registers will be more accessible and will receive planning permission much quicker under the new rules.
But looking at the pilot brownfield registers, it appears the reality is less simple.
In total, 51 areas across 58 councils – with some joint bids – have been picked to go on the pilot brownfield register scheme, with each receiving £10,000 in funding to establish their own registers.
Of the 51 local areas, 15 were picked for the pilot scheme because they have the most brownfield land (see map), with the remaining 36 having to bid for the funding on a competitive basis.
Pilot areas for brownfield register main 15
Planning in principle for housing-led developments on brownfield land in 58 different areas looks to be something of a goldmine for developers, but the registers have thrown up a number of problems.
One senior consultant says that the sites are “far too small” to provide investable projects for developers, with many considered uninvestable due to their size or planning status.
Some of the new brownfield registers appear to contain a large number of sites, says the consultant, but the majority are too small to provide room for housing developments of “more than a few homes”.
Selby in Yorkshire is one council that has signed up to the pilot scheme, with its brownfield register setting out 39 sites that either have planning permission or the potential for development.
But the average size of these sites is only 3.6 ha, and this is skewed by two large sites – Olympia Park in Barlby (42.7 ha) and another site in Barlby (24.3 ha). Omitting these two, the sites in the brownfield register are, on average, less than 2 ha.
In Wigan, which has one of the biggest portfolios of brownfield land of any English council, three major sites of 109 ha, 55 ha and 34 ha inflate the average size of the area’s brownfield plots; without these three, the council’s 48 plots have an average size of 1.4 ha.
Most of these sites, according to the council’s estimates, would be viable for fewer than 20 new homes.
This makes it problematic for both councils and developers to make building on brownfield land attractive, particularly with some land having a negative value – where the land would have to essentially be given away for free in order for development to take place.
Although some of the plots in these brownfield registers may seem far too small for larger-scale development, contractors and developers have found ways to address this by bringing plots together into single packages.
One such scheme is a £142m brownfield project in Leeds, being led by Keepmoat with the local council and the Homes and Communities Agency.
The deal, signed in March this year, sees Keepmoat working with the council to package up smaller brownfield sites to make them both more efficient and better value to develop – building much-needed homes at the same time.
Keepmoat head of technical in Yorkshire West Erica Bell says that the 620-home plan “makes brownfield land work”.
She says that it makes it much more efficient from a contractor’s point of view, meaning that instead of treating each development as a separate entity, Keepmoat can manage a number of smaller developments with one or two teams.
“We have some sites that we know will carry a positive value, and we have a number of others that don’t”
Alex Codd, Hull City Council
She also adds that it makes the land more attractive to invest in for the council and for developers. “There may be [areas] that have got a negative land value, but they then get packaged with land where there is positive land value, so they cross-subsidise each other,” she says.
With the different schemes being managed centrally, rather than acting as individual schemes, it also allows Keepmoat to provide more opportunity to local communities.
“Part of the bid package was to make sure that we provide houses but also we’re trying to make a difference to people in deprived areas by providing them with employment,” Ms Bell says.
Clients take the lead
Other city councils are taking the lead on developing their registers, including Hull City Council, where 60 per cent of new housing is proposed on brownfield land.
|New homes on previously developed land, 2013-15: Top 5 councils|
|City of London||100%|
Hull City Council city planning manager Alex Codd says the council has been particularly successful at delivering brownfield developments in the east and west of the city, after sites were identified using an area action plan to find the most appropriate sites for development.
The council now has a target of building 60 per cent of its new homes on brownfield land Mr Codd says this target is “directly informed” by the register. “The timing has been really positive, as it meant we could feed those [brownfield] sites directly into our local planning process,” he says.
He adds that the council has also taken the approach of packaging brownfield sites together to make developments more commercially viable and better quality in the long term.
|New homes on previously developed land, 2013-15: Bottom 5 councils|
|Vale of White Horse||16%|
“We have some sites that we know will carry a positive value, and we have a number of others that don’t. It’s that ability to enable cross-subsidisation at scale that’s important,” he says.
This approach can also create new commercial opportunities, particularly in the PRS sector, Ms Bell says, with the packaging approach making it more attractive to potential partners.
Keepmoat is already working with PRS firm Sigma as part of a £800m partnership, with its first site already identified in Sheffield.
Ms Bell adds that there are “no noises at the moment” from the PRS market but added that, once plans are approved as expected next year, the firm would expect to see interest in similar developments.
The new brownfield register clearly cannot be used in isolation. A number of contractors and councils are taking measures to make it work more efficiently by packaging up listed land to make it both more commercially viable and more attractive to investors.
Taking those steps is helping both clients and contractors work together to make best use of brownfield land to continue tackling the UK’s housing shortage.