News
| My View - Derby Evening Telegraph |
| Posted on Sep 17, 2008 |
| In the current climate there is a high degree of uncertainty about whether land values and the property market will return to their former levels and, if so, when. There is little transactional evidence of residential land and property being sold on the open market. This, in turn, makes the task of valuing land extremely difficult. Under such circumstances, landowners and developers need to take a long-term view and make sure that land, with the required planning consents, is available so that in time it can be released back in to the market. There must also be an acceptance that land value option fees must be at a more realistic level to enable transactions to happen. Faced with these issues, there is a need for the industry to be flexible. Landowners must realise that the cost of promoting sites through the planning system are significant though they add to the risk. This, in turn, impacts on the returns expected by developers. No longer is a red line on a plan outlining a broad location sufficient. Technical expertise is required to investigate thoroughly the potential issues that impact on how schemes are to be delivered. Ecology, archaeology, transport, landscape, flooding, utility services, education, sustainability and masterplanning, among other issues, all need to be addressed. Developers could argue that, in the economic climate, the costs accrued promoting a site to the Local Auhtority could be seen as replacing the traditional option fees. It is, therefore, even more important that landowners' advisers are fully aware of what is involved in promoting sites. The question needs to be asked: is the landowner seeking a short-term gain or would they prefer to maximise the development value in the long term. The greatest returns will undoubtedly be achieved if the site is granted planning permission. Sufficient investment by the developers should not be hindered by excessive option fees at the start of the project. Given the level of information local authorities now seek prior to issuing their preferred options, the cost is substantial and the level of information provided may be the difference between obtaining a planning consent or not. In essence, given current market conditions, there is a need for landowners and their advisers to take a long term view and ensure that everything is done to promote a site and secure planning permission so that the maximum value can be secured for both landowners and developers. |
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