- But three quarters (78%) of developers call for reversal of BTL stamp duty increase
Releasing more publicly owned brownfield land for development is the biggest opportunity arising from the government’s recently launched housing white paper, according to new research1 among property developers commissioned by Amicus Property Finance, the specialist short term property lender.
Over two-thirds (69%) of developers think increasing the availability of brownfield sites will offer the most potential for developers. The proposed reduction in the time permitted by local authorities to approve planning applications from three to two years (49%), continuation of the Help to Buy scheme (45%) and increasing the focus on building homes in the affordable sector (41%) were the second, third and fourth most popular measures respectively.
Despite showing support for elements of the housing white paper, property developers are sceptical of the government’s target to build one million homes by 2020 with just one in five (21%) believing this target to be realistic.
Amicus’ research revealed a number of additional policies property developers would like to see the government introducing in order to address the housing crisis: more than three-quarters (78%) called for a repeal of the stamp duty rises and tax relief reductions on landlords; more than two in five (44%) would like to see incentives for elderly people to downsize and free up family homes; four in ten (41%) think stamp duty should become a seller’s tax rather than a buyer’s tax and 37% recommended a suspension in capital gains tax to encourage more land to come to the market.
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Keith Aldridge, Founder & Managing Director at Amicus Property Finance, added: “Property developers appear highly supportive of a number of the ideas in the white paper, particularly releasing more brownfield land to the market and the greater focus on affordable housing. The existing ‘Help to Buy’ initiative has also been well received by many developers and we have already financed a number of successful developments in the south east.”
“Though large scale government investment plays a part in stimulating supply, developers see the current tax laws as one of the biggest obstacles to solving the housing crisis, particularly repealing the recent stamp duty increases for landlords.”
Amicus Property Finance, part of Amicus Finance plc, the leading specialist financial services group, has seen a strong start to 2017 having provided more than £500 million of short term property loans last year as it further expanded its customer base among brokers, professional landlords and developers seeking finance for residential and commercial real estate assets.
As part of its growth journey, Amicus Finance plc, which expects to receive its banking licence this year, opened an office in Manchester last year to significantly expand its presence across the North. The new Manchester office provides a regional hub for SME lending, working capital solutions and short term property loans.
Amicus has seen consistently strong funding from the Omni Secured Lending (OSL) Funds. Vintages I, II and III have provided more than £500m of institutional third-party funding to the business. During January and February 2017 alone Vintage III raised more than £200m of new institutional capital, which is being actively deployed to fund new lending activity.
|Where do you see the biggest opportunities for property developers and investors in the housing white paper? (%)|
|Continuation of the Help to Buy scheme|
|Continuation of the Lifetime ISA for first time buyers|
|Increased focus on building homes in the affordable rental sector|
|Reduce the time local authorities have to approve planning applications from three years to two|
|Expectation for developers to produce higher density housing plans where land is in high demand|
|Financial incentive to enable local authorities to increase the size of their planning departments|
|£3 billion to help smaller builders challenge the large developers|
|Release of more publicly owned brownfield land for development|
Source: Amicus Property Finance (March 2017)
Amicus Property Finance’s property loan portfolio is currently made up of 85% residential properties and 15% commercial properties, with 70% located in London or the South East. Its loans are repaid, on average, in eight months and it typically lends between £50,000 and £7 million.