New mayor makes housebuilding pledge
Sadiq Khan’s victory in the battle to become the new mayor of London promises to give the construction industry a shot in the arm – if he can deliver on his promise to deliver up to 50,000 homes per year.
The mayor’s homebuilding plans centre around “seeking out new sources of investment and using planning powers effectively to raise the number of new and affordable homes London builds”.
But with an average of 19,571 homes per year built under Ken Livingstone and 18,364 per year under Boris Johnson, many question whether mass housebuilding can be achieved.
Christine Whitehead, a professor in housing economics at the LSE, has said that Khan’s housebuilding target would “result in an initial fall in development activity and would make many sites financially unviable”.
But it is not just the policymakers in City Hall who want the construction trade to deliver more new homes – and increase the demand for cost-effective and reliable skip hire.
In April a key element of the Self-Build and Custom Housebuilding Act 2015 came into force requiring local authorities in England to maintain a register of everyone seeking land to build their own home or who wants to have a house custom-built for them.
The government claims the register will help double the size of this niche market, creating up to 100,000 additional homes over the next decade.
Advantages of self-build homes
About 7 million adults in the UK say they would like to build their own home, according to the National Custom & Self Build Association.
But less than 18,000 planning applications for a self-build home were submitted last year – 30% below the 2010 peak figure and the second lowest in eight years.
NaCSBA puts this down to the limited supply of individual building plots available, but says a poll it commissioned earlier this year reveals that 12% of British adults expect to research or plan how to build a home for themselves in the next 12 months.
This might be because of the popularity of Chanel 4 TV show Grand Designs, but it is more likely as result of the ability to make significant cost savings and healthy profits if self-builders sell the property.
The Daily Mail has reported that three properties to feature on Grand Designs have gone on the market priced at up to £1,79m. Among them is a castle in Yorkshire that cost £915,000 to complete but is listed at £1.65m
Not only that, a new self-build home is zero-rated for VAT. Other tax advantages for the self-builder include exemption from Capital Gains Tax if it is your primary residence.
There is also the opportunity to make Stamp Duty Land Tax savings because this levy is payable only on the building plot price and not the value of the completed home.
And if the plot is priced at under £125,001, it falls under the current SDLT threshold. This means many self-builders who buy plots that do not have planning permission pay no stamp duty.
Self-build properties are unlikely to provide the extra 250,000 homes the UK needs each year until 2020, but the Self Build and Custom Housebuilding Act 2015 at least acknowledges there is more than one way to increase the country’s property stock.
If you are about to start a self-build project or any other type of construction work, contact Proskips for a skip hire quote.