Property hotspot

The South West is under pressure to develop property for an influx of people moving to the area as well as providing affordable housing for people living in the area. Local authorities are being forced to deal with a raft of legal issues, which have created plenty of work for the local legal profession.

The region will continue to see growth in terms of both housing and employment development, with policymakers increasing the amount of housing that it expects to be provided within the South West. By 2026 some 560,000 new homes will be built in the region. Lawyers will have to be aware of the conflicting pressures that planning departments across the region are under.

New opportunities

Opinions are split over the growth agenda, with some planning authorities signing up and co-operating with landowners, while others are concerned about the loss of green field sites for development. This could lead to an upsurge in public enquiries and protests against development, which will create more opportunities for planning lawyers working through the appeals process.

In Devon, new settlements in Cranbrook, to the east of Exeter, and Sherford, near Plymouth, are central to meeting the housing demands on the region. Both settlements have heavy infrastructure requirements and affordable housing expectations. Sherford, in particular, is in the South Hams District Council (SHDC) catchment area where the local authority requires at least a third of new developments to fulfil its affordable housing criteria.

Questions have been raised about the viability of such developments given the delay in getting work started.

Something needs to give, such as landowner price expectations, planning authority expectations or developer profit levels. There is a clear opportunity for those lawyers involved in these transactions to take a key role in brokering the deals.

On a national level the Highways Agency, which has the power to block developments if they fail to meet its requirements, is gaining notoriety for being obtrusive. Frustrated by the Agency’s narrow stance, councils and regional development agencies (RDAs) find that their energies are diverted to satisfy the Agency’s requirements to get a development underway.

The largest growth area in Cornwall, the Camborne Pool Redruth area, has seen development stalled by the Highways Agency until public bodies agreed a package of measures to deal with potential tailbacks onto the A30 trunk road.

Legislating for costs

Meeting the costs of infrastructure needed as a result of new development is a national issue. To provide funding for infrastructure requirements the Government is now legislating for the Community Infrastructure Levy in the Planning Reform Bill.

Some South West authorities are already proposing their own infrastructure tariffs based on current section 106 law and policy, which will apply in advance of the Government’s new levy.

Kerrier District Council is introducing such a tariff in respect of the Camborne Pool Redruth growth area. Tariffs (and in time the levy) will be sought as part of the planning process and may need to be secured by way of legal agreements.

The South West RDA has just launched a Regional Infrastructure Fund to support the delivery of infrastructure. This is intended to make funds available to pump-prime infrastructure in advance of the moneys coming through the planning system. We can expect that grant funding agreements will be required to ensure repayment of the funds once they have been delivered through the planning system.

In some parts of the South West, development has exceeded demand in the market. In Plymouth residential developers responded eagerly to the city council’s calls for greater investment in the area. This has led to an over-supply of flats in the city both in the rental and sales markets, which has had an impact on values. However, confidence in the city’s property market was given a boost when King Sturge opened its commercial property offices in Plymouth in November 2007. It was the first national property agent to have premises in Plymouth. With the firm wishing to put down roots and make local contacts it can only be good news for the Plymouth legal profession.

Rising property prices in London and the South East continues to create problems for the West Country. Second home buyers are now commonplace in the region. While a few planning authorities have been able to justify restricting new housing development to local residents, there is no statutory control to prevent individuals buying second homes.

This has led to increased pressures to provide affordable housing in parts of the South West at levels that the private sector is sometimes unwilling to sustain. In turn this has resulted in an upsurge in Housing Association development.

It is interesting times for the South West property market. The balance between housing need and deliverability and the new tools and facilities being created to deal with this means that the practice area is constantly evolving. This places pressure on development lawyers to consider lateral and creative solutions to meet these requirements.

John Bosworth is head of planning at Ashfords