‘Planning for the Future’ – The Investment Opportunities Planning Reform Brings

The Investment Opportunities Presented by Planning Reform

Prime Minister Boris Johnson’s touted ‘housebuilding revolution’ was understandably postponed by COVID-19. Now, however, with the virus in retreat and case numbers lessening, the UK Government is once again attempting to finally meet the demand for residential and commercial real estate.

The central pillar of this strategy is the new ‘Planning for the Future’ white paper which sets out the Government’s restructuring of how development rights are granted across England. Land will be designated as either ‘Growth’, ‘Renewal’ or ‘Protected’, and permission for development on the former will be automatically granted if it fits the type outlined in the local authority’s plan.

Paul Howells, CEO of Accumulate Capital.
Paul Howells, CEO of Accumulate Capital.

With the granting of planning permission currently often a slow, opaque process where little is accomplished, a reform such as this would breathe new life into the UK’s construction industry and allow developers to, once again, help sustain the UK’s housing supply.

This goal, conveniently, goes hand-in-hand with another overarching goal of this Government; namely ‘levelling up’ Britain’s infrastructure through targeted regional regeneration projects in the north of England.

Demand for residential and commercial real estate in the north is rising – a phenomenon which has been made more pronounced by COVID-19. With this ambitious regeneration plan playing such a big role in the Conservative Party’s 2019 election campaign, fulfilling this investment pledge is vital.

Opportunities arising?
This planned property resurgence in the north of England, when coupled with the fact that our new working-from-home reality is unlikely to be ending anytime soon, indicates that areas outside of London may provide some fantastic investment opportunities for property investors.

Buy-to-let investors should be aware of the rental yields seen outside the capital in recent years while acknowledging the massive upheaval COVID-19, and the aforementioned planning reform will bring.

The docks on Liverpool waterfront

Totally Money has, for the past few years, compiled a rental yield report covering the most lucrative postcodes in the UK. Liverpool has consistently ranked within the top 10, hitting an impressive average of 10% just last year. Other up-and-coming cities, including Leeds and Sheffield, similarly boasted considerable returns on property investments – with BTL buyers averaging 7.92% and 7.83% in these cities, respectively.

The real estate potential of areas similar to these two Yorkshire cities has not been lost on Accumulate Capital. Earlier this year we announced that we would begin work on a new £12 million commercial development in Doncaster, due to be completed in May 2021. The Doncaster Enterprise Park reflects our broader commitment to meet the commercial real estate demands of regional Britain. What’s more, it also exemplifies how local authorities and private companies can work together to support regional regeneration.

Supporting the regional regeneration of the UK
Looking to the future, the Government’s planning reforms combined with its recent infrastructure investment pledge is positive news for areas of the UK that have long felt overlooked. Not only does it mean local businesses and communities will have access to modern facilities; it also provides new investment ventures for those seeking to invest in real estate. As such, we should also expect a rise in property development finance, be it from investors looking to alternative avenues of real estate investment, or construction companies in need of funding.

For now, it is important to look beyond the current challenges COVID-19 is presenting and understand what can be done to support economic growth, productivity and investment. The Government’s recent investment pledges and planning reforms are a positive step in the right direction, and companies like Accumulate Capital will play their part to support the UK’s post-pandemic recovery.

This article was written by Paul Howells, CEO of Accumulate Capital.

Paul Howells is CEO of Accumulate Capital – an investment and property development firm. Accumulate Capital connects registered investors with developers in the property development finance sector to enable selected, high-yielding projects in the UK and overseas.

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