Added: 11 August 2020
Self builders would consider brownfield sites if offered financial incentives akin to commercial developers (Ipswich Building Society research)
Commercial developers have long been offered financial incentives to build on brownfield sites but new research* from Ipswich Building Society shows that individual self builders would be more likely to consider these sites if they too were offered similar inducements.
Research undertaken by the Society revealed that 82 per cent of potential self builders would feel more inclined to consider a brownfield site if they were offered a tax break such as VAT exemption or other monetary benefit e.g. a government interest free loan to prepare the land for building. Commercial developers can currently benefit from incentives such as the Land Remediation Tax Relief which makes brownfield sites a more attractive proposition.
what is a brownfield site?
Brownfield sites are previously developed land, including sites formerly used for industrial, commercial or even agricultural purposes. Since April 2017, local authorities have been required to keep brownfield land registers, providing up-to-date and publicly-available information on brownfield land suitable for housing. However, Ipswich Building Society’s research also found that a third (31 per cent) of wannabe self-builders were not aware of the brownfield land registers but when the concept was explained to them, almost double the amount of people (61 per cent) thought the registers had potential to help them find a suitable plot in future.
Richard Norrington, Chief Executive of Ipswich Building Society said: “Finding a suitable site is one of the biggest challenges that self builders face but in brownfield sites there is a massive opportunity for people who are open-minded and have vision. As well as there being strong social arguments for revitalising these areas, particularly around town centres, there are also sound environmental reasons as building on a brownfield site not only renews the area itself but also reduces urban sprawl.
“If the government is as serious about encouraging home building as it appears to be from the recent reforms and announcements, it needs to better promote brownfield land registers and it should offer individual self builders parity with commercial developers in terms of economic incentives.”
Reasons for considering self build
Over a third (35 per cent) of UK adults are considering a self build project at some point in the future. The main motivation cited by over half (51 per cent) was the ability to design the layout of their own home, and also the ability to make environmentally-friendly decisions about materials or the build process (28 per cent). Economic or financial reasons were cited by 17 per cent.
Norrington continued: “Since the introduction of government legislation on 1 April 2016, self build projects have become a more recognised and viable choice for many people. However, we feel that much more could be done in respect of brownfield sites. Ensuring brownfield land registers are more widely recognised, as well as making this type of site more attractive financially, would be beneficial to both the government’s housing targets and its environmental ambitions.”
Self build mortgages required for brownfield renovation projects
Any potential self builder looking to finance a project on a brownfield site, needs to ensure that they base their costs on a self build mortgage and not a standard residential product, as most lenders consider major renovation work or a knockdown-rebuild, under their self build criteria.
In addition, some self build mortgage lenders can be reluctant to lend on brownfield sites, so self builders should do their homework before submitting an application or consider seeking the advice of a specialist mortgage intermediary. Self build projects on brownfield sites can be complicated and therefore applicants are much more likely to be accepted by a mortgage provider who undertakes a manual lending approach.