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Mayor should open the door to small builders

From Property Talk Live on July 28, 2014

More homes must be built in London and greater diversity in the construction market could give the industry a much needed boost to meet the growing needs of the capital.

The London Assembly Housing Committee has written to the Mayor urging him to use public sector land to support house building in London by helping new and small developers enter the house building market.

Large developers currently dominate London’s house building industry, but alone do not have the capacity to build the number of homes London needs. To increase overall capacity, the public sector must do all it can to encourage new entrants to the market, especially small and medium sized developers. These developers – who are less likely to have significant land banks – have an incentive to build out their sites quicker than developers with large land banks.

Darren Johnson, Chair of the London Assembly Housing Committee said,

“We need to pull out all the stops to get more homes built for Londoners and public sector surplus land should be used as a catalyst to boost London’s house building capacity.

“Not only do small builders have an incentive to build their sites quickly, they are also well equipped to meet the genuine needs of Londoners. But the high price of land across the capital is making it increasingly harder for small builders to enter the market or to grow.

“The Mayor is going to great lengths to lobby the government to release disused public land and unlock housing development in London. But selling this land to large developers who already have land banks may not be the best way to increase the number of homes built in the capital.

“There is only one chance to sell public land and the Mayor has an opportunity to use it to diversify London’s concentrated house building industry by allowing smaller players to get a foothold in the market.”

The London Development Panel (LDP) – the Mayor’s preferred vehicle for procuring homes on medium to large public sites, uses a streamlined procurement process to sell off public sector land. The panel – which is comprised mainly of established developers – excludes new and small developers who, with access to this land, could add to the overall house building capacity in London.

The Committee has asked the Mayor to consider the following:

•Parcelling public land into smaller sites prior to disposal, with some sites reserved for small builders
•Openness about the framework GLA is considering to help small builders
•Greater transparency to see who is buying land in London through the LDP – where and for how much.

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Source: Property Talk Live