Help to Buy fuelling land deals – new report

THE Help to Buy scheme has had a major impact on the land market in the North, especially in suburban sites, according to a report.

Real estate services and investment firm CBRE says that demand remains strong across the North and values are rising in all areas with the exception of rural south Cheshire, where there is currently a surplus of land supply.

In its Q4 Regional Land Report, CBRE says mainstream house builders are focused on the suburban market while more specialist contractors and developers are looking at city centres for high rise developments and mixed-use projects.

The recent wave of interest in the private rented sector (PRS) within Manchester and Liverpool has strengthened the outlook for 2015, the report says.

CBRE has identified an upward trend in the number of local authorities delivering housing, with some authorities setting up Housing Companies in order to do so. However, the level of building remains low and the rate of increase will be constrained by treasury borrowing rules.

Two government initiatives – PRS Taskforce and a £3.5bn PRS Debt Guarantee Scheme – have been initiated to boost the housing market and establish PRS as an institutional investment class.

To ensure that surplus public sector land continues to be released, the Homes and Communities Agency (HCA) will become directly responsible for its delivery from April. The HCA will be tasked with delivering land with the capacity for 150,000 housing units as announced in the Autumn Statement.
 
The largest HCA region is currently the Midlands, where the Agency controls 596 acres of land over 27 sites. In contrast, the HCA controls 197 acres across 29 sites in the North West.

Head of residential research at CBRE, Jennet Siebrits, said: “The HCA now controls almost 130 sites across the UK, amounting to more than 1,500 acres of land destined for residential or mixed-use development.
 
“This figure is expected to rise as the HCA gains more control over the public estate, with closer relationships encouraged between the Agency and housebuilders in order to create greater transparency over future opportunities.
 
“This initiative has been displaying positive results as reported in the most recent Department for Communities and Local Government figures, with land for almost 90,000 homes delivered by September 2014.”