Campaigns Housing Supply and Rents

Bitesize Budget – Small plots of land

Sally Walmsley
Written by Sally Walmsley

Last month we outlined our key asks of the government in our budget submission, ahead of November 22nd. 

Here we break down the document to run through what we believe the government could do to support you, the residential landlords out there offering vital homes to let at a time of housing crisis. 

Here we outline our call for small plots of public sector land to be redeveloped as homes to rent

Landlords, whether as individuals or as small to medium sized companies, have a good record of investment in new buildings which includes on small plots of unused land.

These plots are too small to be of interest to corporate developers and they are often left empty, becoming unsightly and magnets for anti-social behaviour in a community.

The RLA proposes that local authorities and public bodies, such as the Ministry of Defence and the NHS, should be encouraged to identify small plots (suitable for up to five units of accommodation) of unused public sector land for development by the private rented sector.

The association has worked up various models for land transfer:

  • The public owner of the land retains ownership of the land and receives a share of the rental income that reflects the land value as an overall proportion of the developed property.
  • The land is transferred for payment once the building has been erected or converted and completed. This would mean that the landlord would not have to finance the land purchase up front, avoiding paying the holding costs.
  • The land is held back on a longer lease for the covenanted private rental period. This would mean that the landlord would not have to finance the land purchase at the outset. This model would encourage the landlord to build new units and improve property standards, rather than buy older, cheaper stock. Leaseholds of 125 years would create equity for lenders.

Under these plans there would be a minimum 10-year requirement for renting out in the private rented sector. No affordable housing contribution would be required and there would be an exemption from Community Infrastructure Levy.

At the end of the 10-year period, the landlord would be expected to refinance, but equally they would be free at that point to sell and the user restriction would be lifted.

Work by DJS Research for the RLA found that 46% of landlords would be interested in developing on small brownfield sites, of which 52% would be interested in developing up to 10 homes on a site.

The overall intention of such a proposal would be:

  • To create new rental units (new-build or conversion) to increase supply.
  • To provide extra revenue for local authorities from the New Homes Bonus and council tax by bringing derelict land into use.
  • To support small-scale, local builders.

Packages could be offered with outline planning permission for residential use to encourage rapid development.

In its submission ahead of the November 22nd budget, the RLA has also called for the government to axe its controversial cuts to Mortgage Interest Relief and to introduce tax incentives for landlords offering longer tenancies and energy efficiency improvements among other key asks.

To read the submission in full click here.

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.