Property sector backs Investment Zones but calls for more clarity

Agents and property professionals have backed the creation of Investment Zones to help boost housebuilding but have called for more clarity and speed on the proposals.

Chancellor Kwasi Kwarteng used part of his mini-Budget last week to unveil plans for Investment Zones that would have relaxed planning restrictions and no Stamp Duty on land for development.

The Government said it is in discussion with 38 local and mayoral combined authority areas in England including Tees Valley, South Yorkshire and West of England to set up Investment Zones.

Each Investment Zone will offer “generous, targeted and time limited tax cuts for businesses and liberalised planning rules to release more land for housing and commercial development.”

These will be hubs for growth, encouraging investment in new shopping centres, restaurants, apartments and offices, and creating thriving new communities, the Treasury said.

Responding to the announcement, Stuart Baillie, head of planning at Knight Frank, said: “Any attempt to remove red tape and speed up the planning process is welcome, however localised.

“Almost a third of small business and volume housebuilders who responded to Knight Frank’s recent survey cited planning delays as the biggest challenge for the sector.

“Investment Zones with some form of deregulated planning restrictions are an interesting development.

“ I can see this working for commercial development on business parks but how would it work in more complex urban areas with lots of constraints and a mix of uses?  

“If the Government truly believes that relaxation or reform of planning rules is a lever to drive investment and growth it will need to properly commit to this, pushing through meaningful reforms prior to a General Election in 2024. 

“As we have seen in recent years with an abandoned Planning White Paper and a slowly emerging LURB, taking the reforms from concept to legislation can be a long and drawn out process.”  

Ian Pickering, head of development funding at specialist lender Together, added: “The commitment to drive growth and unburden developers from age-old planning restrictions and EU derived laws, will be much welcomed by developers, architects, and lenders across the UK. 

“Recognising how cumbersome the UK planning systems is, this is a move in the right direction and the simplification of this process should go some way to ease supply and demand challenges currently faced. 

“The scope and speed of this is unclear, and further clarity would benefit everybody.”

However, Simon Gerrard, managing director of Martyn Gerrard Estate Agents and Abbeytown Ltd, lamented the lack of concrete solutions.

He said: “These are the same empty promises made by successive Conservative governments – yielding little to no effect. The single most pressing issue that housing market faces is a lack of supply.

“Put simply, there aren’t enough homes being built due to a planning regime which is simply not fit for purpose. We urgently need more homes to ease the supply/demand imbalance, yet we are no closer to knowing whether the Government will take serious action. The proof will be in the pudding.”