One of the measures announced in Wednesday’s Budget was confirmation of funding partly to enable more housebuilding on brownfield land. So here we’ll look at some of the issues behind building on brownfield land, and at what it might mean for the property market.
First of all, what exactly is brownfield land?
In truth there is no precise definition of what brownfield land is. In planning terms it is generally described as land which is or was occupied by a permanent structure. Or, to put it another way, land which is not a green field – or greenfield land to use the same terminology.
Within that quite vague definition however brownfield land could be anything from building a few houses on land previously occupied by a pub .... right up to building hundreds of homes on a former factory site.
What key issues does building on more brownfield land pose?
Building on brownfield land, as opposed to tarmacing over green fields, is something that is popular with both environmentalist and so-called NIMBYs alike. Developers who bring such schemes forward are likely to find less opposition than otherwise, and perhaps even support for their plans.
The cost of building houses on brownfield land is not necessarily cheap, however. Yes, brownfield areas often have existing infrastructure unlike greenfield sites. However the cost of remediating brownfield land can be high at around £25,000 to £100,000 per acre according to some experts. Indeed it seems that this is something that the Budget announcement is aimed at assisting with.
Very importantly, location is particularly relevant with housing development on brownfield land. Previously developed industrial land in particular is not necessarily located in places where people want to live. By definition redundant brownfield land is often redundant because its location is not that desirable. Brownfield land is frequently adjacent to continuing industrial uses or has access problems. These factors in turn can increase the development cost, reduce the developed value and make brownfield sites less attractive to developers – and more risky.
Covid has actually made this even more relevant. The pandemic has shown that people want to live in more rural locations with more green space. And less so in urban locations where brownfield land is normally located.
Additionally one factor that is often overlooked with brownfield development is that there is not actually as much brownfield land as those who promote this kind of development might suggest. Yes, three or four decades ago there may have been vast swathes of derelict industrial land on which to build houses still readily available. Today, however, many of the most attractive brownfield plots – particularly in cities like London, Birmingham, Manchester and Leeds for example – have already been developed, or at least earmarked.
The National Housing Federation (NHF) says there is about 25,500 hectares of brownfield land in the UK. That’s still a relatively small amount compared to the amount of greenfield.
So will the Budget measures aimed at increasing housebuilding on brownfield land actually make much difference?
In the Budget the Chancellor pledged an extra £1.8 billion which he said was enough to bring 1,500 hectares of brownfield land into use, meet the Government’s commitment to invest £10 billion in new housing, and ‘unlock’ 1 million new homes.
It all sounds quite impressive: Promising more housing and making more use of brownfield land with all its environmental overtones is something of a two-for-the-price-of-one policy announcement. It may also appeal to voters, particularly in the areas around London, who are particularly vociferous about greenfield development.
The announcement of extra funding wasn’t entirely new however .... as many Budget announcements tend not to be. The Chancellor announced National House Building Fund funding towards land remediation and infrastructure back in the autumn 2020 spending review, which itself re-announced money already allocated. A new Brownfield Land Register was established back in 2017. There has been a ‘brownfield first’ preference in planning and development since about 2001. Public money has also been invested in remediating brownfield land since at least the development corporations of the 1980s. So why are there not already a lot more new homes on brownfield land?
The Budget announcement was also quite light on detail as to how the funding announced will actually be used.
In summary, most likely extra funding will help persuade some developers to develop more on brownfield land, particularly those who already carry out this kind of development. It might help to make what can sometimes be a risky type of project less risky.
However, no matter how much funding is put into encouraging the development of housing on brownfield land it will be difficult to change the basic fundamentals: There is only a limited amount of brownfield land which meets the basic essentials of location, viability, availability and desirability.
So, while the Budget announcement seems impressive it remains to be seen what a difference it will make to the housing market. The impact of that £1.8 billion of funding in terms of more houses appearing on brownfield sites might not be all that great.
Stop Press. In at least one press report following yesterday’s Budget experts from Knight Frank, Savills, Rightmove and Zoopla all appear to be very circumspect about the impact the new brownfield funding will have.