Increasing Densities - Increasing Profit?
Recently the Urban Task Force set up by the Government has issued a report. On the amusing side it has slammed the flagship new developments being championed by the Government in the Thames Gateway as 'Poor'. There was criticism of the design, lack of sustainability and no integrated transport strategy.
This is of little interest to those of us looking to undertake small scale developments, but there was one issue that is of interest - Density.
Currently Government guidance states that new housing development should be within a density range of 30 - 40 dwellings per hectare (that’s 12 - 20 dwellings per acre for those of us who know what an acre looks like but struggle with the concept of a hectare).
The Urban Task Force is recommending that the minimum should be raised to 40 dwellings per hectare (16 dwellings per acre).
Now you can just build small detached houses at 12 per acre but to build two storey houses at 20 per acre you are talking about very high density terraced housing.
This means that if this minimum is adopted as policy by the Government it will be nearly impossible to build new detached houses on anything much bigger that a single infill plot and even then the planners may ask you to build more if it is a large plot. On anything else you will have to build terraced houses or flats.
Is this a good thing for developers?
Well increased density often means an increased land value and an increased overall Gross Development Value and if you get it right this should mean an increased profit.
So that’s good news then?
Well yes and possibly no. If every developer is forced into building high density housing and flats that market will become saturated and prices will stagnate or fall.
However as always there will be opportunities for those that look for ways to provide something that will become ever more scarce. That will be the quality new detached house in a good location or a quality refurbishment that meets the standards of a new build with the charm of retained period features.
Stay tuned to Property Fortunes...
This is of little interest to those of us looking to undertake small scale developments, but there was one issue that is of interest - Density.
Currently Government guidance states that new housing development should be within a density range of 30 - 40 dwellings per hectare (that’s 12 - 20 dwellings per acre for those of us who know what an acre looks like but struggle with the concept of a hectare).
The Urban Task Force is recommending that the minimum should be raised to 40 dwellings per hectare (16 dwellings per acre).
Now you can just build small detached houses at 12 per acre but to build two storey houses at 20 per acre you are talking about very high density terraced housing.
This means that if this minimum is adopted as policy by the Government it will be nearly impossible to build new detached houses on anything much bigger that a single infill plot and even then the planners may ask you to build more if it is a large plot. On anything else you will have to build terraced houses or flats.
Is this a good thing for developers?
Well increased density often means an increased land value and an increased overall Gross Development Value and if you get it right this should mean an increased profit.
So that’s good news then?
Well yes and possibly no. If every developer is forced into building high density housing and flats that market will become saturated and prices will stagnate or fall.
However as always there will be opportunities for those that look for ways to provide something that will become ever more scarce. That will be the quality new detached house in a good location or a quality refurbishment that meets the standards of a new build with the charm of retained period features.
Stay tuned to Property Fortunes...
0 Comments:
Post a Comment
Links to this post:
Create a Link
<< Home