UK: Katherine Russell, director of BTR at the John Lewis Partnership has urged chancellor Rachel Reeves to introduce tax breaks for developers who are prepared to start work on sites as soon as they are consented.
Writing in The Telegraph, Russell said the chancellor “should look at tax incentives… where a developer commits to building right away”. She also urged the government to cut red tape for builders to help the industry meet Labour’s goal of building 1.5 million new homes over this parliament.
The partnership warned that construction has stalled across the country even as “most people accept the drastic need for new housing”. “Many good schemes… still continue to be refused,” Russell said.
John Lewis’s attempts to deliver BTR schemes have faced significant delays in the planning system. The partnership is attempting to build flats on top of Waitrose stores. Its first project in Bromley, south London, was approved last month after a two-year wait. It has launched an appeal on a second scheme in Ealing, west London, over the length of time councillors are taking to decide on the project.
Russell said “cutting red tape” would speed up investment in new housing, as would spending the billions of pounds worth of unused development levies.
Local authorities have the ability to charge developers a tax when they build new properties, with the money meant to be used to fund local infrastructure such as schools and roads. However, research by the Home Builders Federation last year found £2.8 billion was currently sitting unspent. It estimated that the property industry pays more than £7 billion in direct taxes each year.
Tax breaks in return for immediate construction starts would help tackle “land banking”, where companies buy up land but wait for the most advantageous time to develop it. This practice has been blamed for the slowdown in the delivery of new homes, though the industry argues it is a necessary practice for financial management. A Competition and Markets Authority (CMA) report earlier this year said it was not a major cause of delays.
The call for tax breaks comes after Labour last week unveiled a drive to get Britain building in an effort to fast-track thousands more first-time buyers onto the property ladder.
Housing Secretary Angela Rayner has reinstated compulsory housebuilding targets for councils and said the default decision for new homes in urban centres, including towns and city centres, should be to grant permission.
