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Can brownfield new builds deliver the homes we need? – Woolf

by: Trudy Woolf, sustainability director at Legal and General Surveying Services
  • 30/05/2022
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Can brownfield new builds deliver the homes we need? – Woolf
As living costs continue to rise there has never been a greater need for attainable and secure housing to help borrowers find their feet on the property ladder.


Where and how to build the homes we need remains a struggle, begging the question – could redeveloping existing brownfield structures provide a solution to the problem, or is a more nuanced approach needed?


Councils handed funding to boost brownfield development

It’s clear that the government believes brownfield sites could help reach its ambition to build 300,000 new homes a year.

In February, the Department for Levelling Up, Housing and Communities (DLUHC), announced that £8m was being awarded under the Brownfield Land Release Fund (BLRF) to 13 projects from local authorities in England. This comes on the back of £69m already awarded to 76 projects under the BLRF in 2021. Collectively, the fund aims to unlock and transform brownfield sites and rejuvenate derelict structures into new places to work and live.

These measures are certainly encouraging when it comes to getting more people on to the property ladder, but it is easy to get carried away and overlook some of the specific issues facing new-build properties on brownfield sites.


The challenges facing lenders and borrowers

Very often, access and location can be less than ideal. For instance, re-purposed office spaces frequently have to share access with existing commercial premises, making them less attractive to prospective buyers.

Investor projects that have previously failed may also be repurposed for residential living, prompting the question: what conversion has taken place inside the building?

Often, many rooms in these buildings have no exterior glazing, meaning that the room “borrows” natural light from adjoining space. This can prove to be a real issue in repurposed office space, as light constantly shines through and requires blocking off. Equally, the size of the units or the square footage of rooms can be significantly reduced by the characteristics of the existing physical structures.

There are other pitfalls too.

Brownfield sites, even with incentives for developers, can be costly to develop, and come with their own set of issues, such as contamination. In simple terms, contaminated land refers to land which has been polluted, which can subsequently cause material harm to people or protected species.

Indeed, Legal and General’s latest Rebuilding Britain Index found that better housing drives better health, making it imperative that contamination issues are addressed with investment in physical and economic infrastructure. If not, brownfield sites may fall short of providing homes for healthy, happy communities.

Additionally, contaminated land can cause problems for both homeowners and lenders, due to the liability which alters according to when the contamination is discovered.

While a developer might be responsible for rectifying issues with brownfield sites, owners of new-build properties can also become liable if the developer goes out of business after they purchase the property. Moreover, issues of this kind can take years to resolve, and the new build owner and their mortgage company can incur significant loss of value, which can even result in an inability to sell or re-mortgage.

These obstacles can provide ample scope for challenging mortgage lenders’ current lending policies and in many cases a review might be pertinent to ensure opportunities are not unnecessarily spurned. Having adequate information to hand remains key to understanding security and any associated liabilities.


Can brownfield development aid the transition to net-zero?

Following the COP26 summit, the focus on net zero housing and building has unsurprisingly grown. Barratt’s Z house, the first new home in the country to go beyond the new Future Homes Standard by delivering a carbon reduction of 125 per cent, is one example of what is possible in this area of the market. However, these ambitions are difficult to accomplish in brownfield sites that were originally built for a different purpose.

While brownfield redevelopment sites are an important way to respond to the housing crisis, clearly more needs to be done to make them a more attractive prospect for developers. If they are to be successful, there needs to be better incentivisation of the industry, while ensuring measures are put in place to protect prospective buyers.

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