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Published 26 junio 2018
Robert Lee, Head of Residential at international law firm DAC Beachcroft, has responded to the draft Sir Oliver Letwin's independent review of housebuilding in the UK, which made recommendations to boost the number of new homes built from 220,000 to 300,000 per year.
Robert Lee said: "Sir Oliver Letwin's draft report acknowledges the realities facing the housing sector, and recognises that it is in the developers' interests to complete as many house sales as soon as possible. Indeed, it is these sales that fund the next stage of development or another site.
"Land acquisition is the developer's lifeblood and key to their strategy. Land banking is not a valuable exercise for housebuilders – it is a necessary resource. The report does, however, focus on the issue of market 'absorption rate' – the proposition that certain housing products are drip-fed into a local market to sustain price, but which pace is symptomatic of larger sites, which are naturally slower to come out of the ground.
"Whilst the Government's policies have recently driven larger settlements (i.e. the Garden Village initiative), the analysis now reveals that it is that scale which is inhibiting the variety necessary to increase build-out rates. The financial crisis saw smaller developers priced out of the market - they could neither secure development finance nor achieve the economies of scale. They are slowly re-emerging but, while they can provide some of that variety, there is a long way to go before SMEs will have any significant influence. The key appears to be incentivising multiple-outlets and more variety of house-types on larger sites – but the report recognises development economics is highly sensitive to policy intervention and we await detailed recommendations in the Autumn final report.
"Collaboration is part of the solution between all parties involved, and what all parties are determined to avoid are knee jerk responses that could result poor quality, unsustainable schemes. Considered placemaking does take more time and also involves, quite rightly, discussions with local communities.
"Flexibility of construction is another response. Established developers as well as new entrepreneurs are looking at offsite modular construction both for speed and as a way to overcoming an over-reliance on one material – bricks!"
Having worked in the development sector for over 25 years, Robert Lee now specialises in the regeneration field with a particular emphasis on the housebuilding sector.
He has advised a number of clients on significant site acquisitions, and mixed use redevelopments, and is involved in the drafting of complex development and collaboration agreements. In addition, he has acted on a number of high profile PRS Developments including the 'Helix' Tower in Canary Wharf.
London - Walbrook
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