Two proposals set out by the government during the last quarter of 2007 are likely to have major impact on the house building industry in 2008 and beyond. The first being the call for 3 million new homes by 2020, and the second and most significant, the proposed introduction of a statutory new planning charge.
The planning charge is designed to help pay for the infrastructure needed for new developments, and encourage regions and local authorities to plan positively for housing and economic growth.
The Government’s decision to scrap the controversial Planning Gains Supplement (PGS) in favor of the planning charge will be a relief to the industry, which feared that PGS would create a vacuum on the number of new sites brought to the market, and make many schemes financially unviable.
While the planning charge is a better way forward, it is not without its concerns. Any tax on land, which this undoubtedly still is, will either mean a rise in the cost of homes or will reduce the land value, which may have a negative effect on the number of sites coming forward for development.
The proposal for the planning charge is that it will based on a costed...
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