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Help for smaller developers in the Planning Reform White Paper – Two major new incentives

The White Paper published today includes incentives that are great news for smaller housebuilders throughout England, says Heather Powell.

There are two significant incentives that will really help smaller developers.

The first is the time at which a developer has to pay a levy to fund local infrastructure such as schools, playgrounds, community centres and affordable housing. Currently these fees have to be paid at the start of a development, so the developer has to borrow the money or fund it from working capital, long before any money will come in from the sale of housing.

The new levy, to be called the ‘National Infrastructure Levy’ will be payable as the new houses are sold.

This payment point is critical. Whilst the Infrastructure Levy payment will be higher than the levies payable under the current regime, certainty of the amount payable and the timing of the payment at the end of the development when money is coming in from the sale of houses, will be a huge advantage for smaller developers with limited capital.

The other win for smaller developers is referred to in the final pages. The Government will temporally lift the threshold from which developers must contribute to affordable housing.

Currently if a scheme is for 10 or more homes a contribution must be paid towards the provision of local housing. This is going to be temporarily lifted to 40 or 50 homes, the figure to be agreed following consultation.

This will be a major benefit to smaller developers who develop most schemes of this size, improving the profitability of such schemes and providing a real boost to small developers as they work their way out of the pandemic.

Would you like to know more?

If you would like to discuss any of the above guidance, please contact Heather Powell or your usual Blick Rothenberg contact.

For any press queries, please contact David Barzilay whose details are to the right.