For those involved in housing during 2008/2009, survival was the main objective. The immediate aftermath of the crash now at last appears to be behind us with house builders tentatively looking to acquire new land.
The forthcoming spending review is bound to impact negatively on the ability of the public sector to subsidise the development process and, coupled with the inevitable contraction in the public sector work force, presents fresh challenges for developers going forward.
The constraints on mortgage availability and the uncertainties on the planning system seemingly pile on the misery but these circumstances could at last create genuine mutual benefits in cooperation between the public and private sectors.
Land is a finite resource in an overcrowded land. Developers who are now prepared to look at new development opportunities are understandably risk averse. The public sector has huge amounts of land available for development and the opportunity for public and private joint venturing has never been better; where land is made available for development the parties share risk and reward once the scheme produces profit.
This will require both parties to dispense with the mutual suspicion which has blighted such relationships in the past. The structures of local asset backed delivery vehicles and others partnering arrangements are all there to be used.
For the more challenging regeneration projects in particular, negative land values and viability remain a significant problem but once again opportunities exist to get development commenced if local authorities will take a more realistic view of planning gain.
The current economic environment is here to stay and the positive economic benefit of regeneration on a region should make this a common sense position. To coin a well known phrase ’we are all in this together ’!
Robert Lee is head of real estate at Davies Arnold Cooper and will be speaking at this year’s RESI 10 conference.