Will city-based property investors see more opportunities?

More brownfield sites are set to be unlocked after housing secretary Michael Gove’s latest announcement on planning changes, and it could present more opportunities for property investors in urban areas. 

Previously developed but currently unused land across the UK – known as brownfield land – is set to see accelerated development as part of Michael Gove’s latest raft of planning announcements, published yesterday. The housing secretary says planning authorities will have more freedom when considering applications to develop such sites.

As part of Gove’s consultation paper, planning authorities would need to give “significant weight” to the advantages of creating as many homes as possible to tackle the shortfall in a number of areas, and a key focus for this would be building on brownfield land.

Councils in England will also be instructed to be “less bureaucratic and more flexible in applying policies that halt housebuilding on brownfield land”. In recent years, planning bodies have faced criticism for failing to push through applications, creating a backlog that is said to have slowed down housebuilding.

Key cities for property investors

The potential boost to the number of new homes being created in the UK – with a particular focus on the “top 20 most populous urban areas” – could provide some key opportunities to property investors who are looking to invest in a city set for major redevelopment or regeneration.

Many property investors hone in on areas that have already been earmarked for future investment, and this includes places where new homes are set to arrive. Property investors that favour investing in off-plan developments may also find a greater range of opportunities if planning rules are eased to stimulate housebuilding.

In these top 20 cities, planning authorities will be made to follow a “presumption in favour of brownfield development”, if housebuilding falls below expected levels. The consultation states: “This will make it easier to get permission to build on previously developed brownfield sites, helping more young families to find a home.”

In a separate interview with the Sunday Times, Gove stated that he planned to change the rules so that sustainable developments on brownfield land in cities such as Birmingham, Sheffield or Manchester should automatically be given the go-ahead.

Again, these are key cities for property investors focusing their search away from the capital, and the changes could unlock new opportunities in these locations.

Focus on cities

Commenting on the fact that the latest proposals focus solely on cities and towns, prime minister Rishi Sunak said: “There’s little point in trying to force large new estates on our countryside and green belt when that is where public resistance to development is strongest and where the GP surgeries, schools and roads don’t exist to support new communities.”

In further key changes that will affect built up areas, including the cities and towns in the UK that are especially sought after by property investors, the government has published proposed changes to permitted development rights that would make it easier for developers to convert shops, offices and other premises into new homes.

These changes would also make it easier to demolish existing, unused buildings and create new homes in their place.

Converted and new-build properties are particularly popular among property investors at the moment, largely due to their energy efficiency credentials. While the higher minimum energy efficiency standards (MEES) have not been brought in as expected, energy efficiency is still gaining in importance in the housing market.

Recent research found that one in five of today’s tenants favour a property with a higher EPC rating, due to both the lower energy bills this brings and the higher standard of living. More and more lenders are also bringing out “green mortgage” options, as a further incentive to property investors and homebuyers to consider an eco-friendly property.

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