Government reforms are making grey belt development easier to get through planning, but infrastructure costs and uncertainty are still keeping many developers away, according to new research from specialist bank Shawbrook.
Shawbrook Development Finance surveyed 500 professional property developers aged 21 and over between 14 and 25 August. Of those, 56% said the reforms had made planning permission easier to obtain, 51% said they improved the financial viability of grey belt development, and 40% said they were now more likely to pursue grey belt sites. A further 39% said the changes had reduced planning times.
Even so, only 42% of developers have been considering grey belt land for future schemes, and 21% said the latest reforms created additional uncertainty for their business.
What holds back grey belt development
Infrastructure requirements and costs are the most common obstacle, cited by 52% of respondents, followed by planning uncertainty (43%) and environmental requirements (42%). Land costs concern 37%, local opposition 27%, affordable housing requirements that make schemes unviable 26%, and a lack of suitable sites 23%. Just 6% pointed to a lack of clarity over what qualifies as grey belt, while 2% said nothing is stopping them.
Among developers who have built on grey belt land, 41% said starting work was straightforward. Only 33% found it complicated, and 8% reported delays.
“Unlocking land is a welcome step, but it won’t deliver on its own unless it also addresses developers’ concerns that these sites will be costly, complicated and commercially unviable,” said Terry Woodley, managing director of development finance at Shawbrook. “The reforms are clearly heading in the right direction, and more than half of developers telling us that planning permission has become easier shows they’re having an effect.
“Grey belt sites are often not a developer’s first choice, and the additional infrastructure and environmental requirements can add cost and work that developers have to absorb. Over time, more successful schemes should build confidence, but the Government can help speed that up.
"Local authorities making confident use of the compulsory purchase powers already introduced could help assemble sites more quickly; clearer and simpler planning requirements would reduce uncertainty, and targeted incentives could help more schemes stack up. Getting those right would help the industry keep building, rather than stalling at the first hurdle.”
