Jackson Cohen: Land banking review does not address fundamental issues

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  • 16/01/2018
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Jackson Cohen: Land banking review does not address fundamental issues
An urgent review into land banking was announced in the Autumn Budget last November, but Ray Cohen, director of intermediary Jackson Cohen, believes it will not be enough to address the “fundamental” issues restraining the housing market.

The independent review will examine the gap between the number of planning permissions granted against the number of houses actually built.

Chancellor Philip Hammond said that as part of the review, compulsory purchase powers will be applied “as necessary” when land is found to be withheld for commercial, rather than technical reasons.

While Cohen thinks the review might free up access to land, and the government’s focus on housing could drive opportunities through to smaller builders – it does not address the root problems of the market.

“It wouldn’t surprise me if they look to find ways to ease planning, and possibly look at the time constraints on people who have got land in terms of build out,” said Cohen.

He continued: “The government will put a lot more focus on smaller housebuilding. Builders will have more business, and more small development – so in terms of the development market, it’ll carry on being a mini-boom.

“But whatever they put in place, they’re just scratching at the surface.”

 

Saturation point

The problem, says Cohen, is that fundamental supply and demand issues won’t be addressed by freeing up land.

“Even if they turn around and make a lot more land available, who can make the builds? There just isn’t the skill set to physically build the houses,” he commented.

And even if supply measures are implemented, Cohen thinks there just aren’t people there who can afford to get onto the property market to provide the necessary demand.

“It’s reaching a sort of saturation point where people can’t afford to get onto the housing ladder, even if they’re in their 30s,” he said.

Cohen continued: “The market may not go up significantly, but they still won’t be able to afford it. So say you build another 10,000 houses – if there’s not enough demand, it’ll help a few more people, but it won’t really solve the problem.”

As a result, Cohen thinks that there will be more rental activity: “And that’s not going to change significantly because of the sheer cost of property.”

And although Cohen acknowledged that government schemes are there to help first-time buyers, he thinks they can be exploited.

“Of course, the first time buyer schemes allow first-time buyers to be charged more for their property as the builders seize the opportunity knowing they have the financial boost from the scheme,” he said

Cohen added: “The fundamental problems that restrict the market are still there, and I don’t see how they’re going to change those – unless they do something really radical and even then it will take years to achieve.”

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