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Research 11 February 2015

Chrome February 2015 - Tax and regulatory news

Wandsworth council has increased its house building target by 60%.

Nick Barnes, Head of Research

Stormy Cloudy Settled Fair Fine

Wandsworth council has increased its house building target by 60% in a bid to meet demand from middle-income workers who have been squeezed out of the London housing market. The borough now plans to deliver 18,000 homes over the next 10 years. The council may additionally take forward major regeneration plans for three council estates and establish a housing company to deliver more homes for private rent.

Some of Britain's biggest property companies have condemned a recent government policy which exempts developers of empty buildings from paying for the construction of further affordable housing. Westminster council estimates it could lose up to £1bn in housing payments as a result of the policy.

Local planning authorities could be placed in special measures if they fail to put in place local development orders (LDOs) on brownfield land suitable for new housing. The recently announced special measures mechanism allows developers to submit their applications directly to the Planning Inspectorate, bypassing the local authority. The consultation document defines brownfield land as being suitable for new housing if it is deliverable, free of constraint, capable of development and capable of supporting five or more dwellings.

Islington Council has set out draft planning measures that would require new homes to be regularly occupied in an attempt to halt the rise of so-called "buy-to-leave" properties in the borough. Islington has seen an increase in new homes sold as investments, often marketed off-plan overseas, and left to stand empty - especially in the south of Islington near the City. Under the proposals, new homes could not be left unoccupied or unused for longer than three months, and would have to be occupied for at least 14 days in any three-month period. Failure to comply would see the council take legal action such as seeking an injunction from the High Court against the owner. Persistently breaking the injunction could lead to a fine, prison and even seizure of the empty property. The new planning proposals would not affect existing homes.

NB comment: the proposed change in policy in Islington towards new homes that are bought for investment and left unoccupied could prove an interesting test which other boroughs might adopt. This in turn could have a considerable impact on the off-plan sales market across the capital going forward.