Self-builders would consider brownfield sites if offered financial incentives

82% of potential self-builders would feel more inclined to consider a brownfield site if they were offered financial incentives akin to commercial developers, according to research from Ipswich Building Society.

Related topics:  Property
Rozi Jones
28th August 2020
brownfield
"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."

Self-builders said a tax break such as a VAT exemption or other monetary benefit, e.g. a government interest-free loan to prepare the land for building, would encourage them to consider a brownfield site.

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%) of 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%) thought the registers had potential to help them find a suitable plot in future.

Reasons for considering self-build

Over a third (35%) of UK adults are considering a self-build project at some point in the future. The main motivation cited by over half (51%) 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%). Economic or financial reasons were cited by 17%.

Self-build mortgages required for brownfield renovation projects

Borrowers will need a self-build mortgage and not a standard residential product, as most lenders consider major renovation work, significant extensions or a knockdown-rebuild under their self-build criteria.

In addition, some self-build mortgage lenders may be hesitant to lend on brownfield sites so intermediaries should do their homework before submitting an application. 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.

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.

“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.”

More like this
Latest from Financial Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.