Tax breaks could draw self builders towards brownfield sites

Eighty-two 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, new research from Ipswich Building Society has revealed.

The society suggested that commercial developers have long been offered financial incentives to build on brownfield sites but that individual self builders would be more likely to consider such sites themselves if they were to be offered similar inducements.

Commercial developers can currently benefit from incentives, such as the Land Remediation Tax Relief, which makes brownfield sites a more attractive proposition.

Brownfield sites are previously developed land, including sites formerly used for industrial, commercial or agricultural purposes and since April 2017, local authorities have been required to keep brownfield land registers to provide information on brownfield land suitable for housing.

Ipswich’s research, however, found that 31% of potential 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.

“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,” commented Ipswich chief executive, Richard Norrington.

“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 homebuilding 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.”

The society also suggested that intermediaries may find they need to educate their clients about basing their costs on a self build mortgage and not a standard residential product, because most lenders consider major renovation work, significant extensions or a knockdown-rebuild under their self build criteria.

“Since the introduction of government legislation on 1 April 2016, self build projects have become a more recognised and viable choice for many people,” Norrington added. “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.”

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