When it comes to public perceptions it seems that housebuilders sit close to the bottom alongside land promoters, bankers and energy companies. Such negative views of land promoters are generally misplaced.
As we all know land promoters work with landowners to secure control of unconsented land, then achieve planning consent for housing and then bring the land to the market as development land. Barratt is the largest purchaser of such land in the UK, and deals with many of the major land promoters.
That experience has prompted my view that land promoters should actually be celebrated for the following reasons:
1. They mean that more houses get built. Period. Without land promoters navigating the torrid UK planning system there would be far less consented housing land available for housebuilders and others to build on.
2. They play by the rules in front of them. Put simply, if a local authority does not have a local plan or a 5YLS there is a good chance that planning permission should and will be granted. Playing by the rules in a highly risky environment should be applauded not criticised.
3. Land promoters help keep land prices down. Yes they (and their landowner clients) always want the highest value for the particular piece of land they are marketing but the macro effect of more consented land is moderating land prices. This is only good for building up supply.
4. We need land promoters more than ever. Since the recession some housebuilders are more risk averse and it is inconceivable that housebuilders alone, without landowners and land promoters, can secure enough planning consents to deliver 300,000 homes per year.
5. Land promoters often don’t compete with housebuilders for land. When Barratt is looking for unconsented sites to control, and secure consent on, we generally aren’t looking for sites under 100 units. It simply doesn’t suit our approach to risk or our fast asset turn business model. Similarly sites for 5/10,000 units are more akin to major civil engineering or new settlement projects than the scale of opportunity which enables Barratt to easily produce great places for our customers. Albeit I can’t comment for other housebuilders.
The initial Letwin Review findings perhaps mark the first signs of a sensible change in attitude to land promoters. Letwin appears to have realised that, for the larger sites described in (5) above, land promoters can play a powerful role in introducing different players onto a site. Maybe mixing up large and small builders, and both market sale with PRS developers.
Whilst market absorption rates will always be the key determinant of how quickly a site builds out, it seems that land promoters can and will introduce new approaches to site delivery which can help drive up the build rate on large sites. And it is vital that the planning system produces a full range of both larger and smaller housing sites to drive up delivery.