Building on Sand

Hugh Ellins’ Blog – September 2018

The Silly Season for news, in general, did not happen this year – what with:

(a)          Brexit;

(b)          the fight within the Tory Party;

(c)           is or is not Corbyn an anti-Semite;

(d)          is the Labour Party anti-Semitic; and, of course,

(e)          regular news from over the water concerning Donald Trump.

The Silly Season in matters property did happen, as not only I, but most of the people in the property world disappeared for their holidays.  Me, I went with the family to Brittany.  What more can man ask but to be on holiday with family including young grandchildren, a 2.5 km beach of sand, a sleepy French holiday resort, French food, and French wine – not much in my book.

The holidays, combined with the uncertainty as to the future of the pound and whether or not we will be in Europe and, if so, on what terms has definitely made people more cautious in the property market.  The deals are taking a little longer than usual to bring to conclusion.  That is usually occasioned by some corporate finance director redoing his figures.  The residential conveyancers are reporting a slow-down in the market, particularly in London.  There appear to be many sellers but not many buyers.  Those buyers that do exist are quite particular.

So, you may ask, where is all this preamble leading?  What with being on the beach and now only a sensible amount of work-load on the desk I have been thinking about the ways in which the country can build much needed new housing and at a quicker pace.  There are various schemes that are in place or being proposed.  The Government Infrastructure Scheme for one.  However, none of the schemes deal with one of the major problems in getting a planning permission.  The major problem arises in the granting of the planning permission.  The Local Authority passes a planning resolution that requires a Section 106 Agreement to be concluded prior to the actual grant of the planning permission.  Here is the problem.  Unless the developer is able to accept a local planning authority’s standard Section 106 Agreement, which is rare, negotiations will take anything from six months up to (in extreme cases) two years.  Why is that?  In my view, there are two reasons.  The first is that for some time now the legal teams of various local planning authorities have to treat each of the departments with which they have to liaise as clients and are, therefore, led instead of leading.  The second is lack of personnel and the fact that those who are employed by the local planning authority are under significant pressure.  Several of the personnel are showing the classic signs of pressure.  Is there a resolution to this problem?  The answer to that is yes, but it requires the local authorities being able to recruit more personnel.  That will require an increase in the overall budget and an increase in the amount of wages paid to each individual.  Do I see any prospects of a change in this situation?  The answer to that is ‘no’ because I do not see the present government having the inclination to release more funds to local authorities.  In fact I see the opposite.  Additionally, if the next couple of years produce the economic uncertainty that both Remainers and Brexiteers seem now to accept, I cannot see even a changed government, and one on the Left, actually being able to raise the funds without putting further downward pressure on the economy.

Hugh Ellins