Leading regional estate agent Mullucks Wells has warned that a recent High Court ruling lessens the likelihood of the UK ever hitting its house building targets.
Following a legal challenge by Reading Borough Council and West Berkshire District Council, the ruling by Justice David Holgate forced ministers to scrap guidance which excluded developments of 10 homes or fewer from the requirement to provide or contribute to affordable housing provision. The Department for Communities and Local Government (DCLG) has said it will appeal the High Court’s ruling.
Mullucks Wells Land & New Homes Director Daniel Galati said: “There’s no question that this will lead to fewer homes being built as a result. It has already stopped a stack of proposals in their tracks and a lot of sites are now being renegotiated.
“Sites that may well have been suitable for 10 units will now be reduced to whatever the new threshold is, so full use won’t be made of the brownfield land available. Consequently it will mean less income for districts and boroughs – the very same organisations fighting for a change to the guidance in the first place!”
Daniel Galati says that the contribution small developers make to the house building programme should not be underestimated.
He explains: “Small sites are the engine rooms of UK development. They are invariably built by small firms who have proportionately higher costs. The economic viability of their schemes is often on a knife-edge, with little ability to challenge local authority demands for affordable housing. This latest ruling now means that they will simply give up trying to build on certain sites, leading to fewer homes of all types.
“What’s more, small and little used commercial sites which could be more productively turned over to residential housing won’t even be attempted.”
Daniel Galati said that he sincerely hopes that a future appeal by the DCLG is successful.
He adds: “No one doubts that the country desperately needs more homes. It is already falling far short of current house-building targets. A ruling like this is a significant blow for smaller residential developers and will only serve to ensure that those targets are even harder to meet."