A few additions to this week's budget could provide a boost for self-builders and renovators and help kickstart the economy. A Boost to the Supply of Single Building Plots Offering landowners an incentive to sell-off individual serviced plots by offering tax breaks could change the profile of the housebuilding market in the UK, resulting in a significant increase in one-off, sustainable, individual self-build homes, whilst also improving affordability. This could provide an important boost to the economy.
At present it is easier and more cost-effective for landowners to sell development land as a single entity to a large housebuilder, and it is easier for councils to deal with one entity in terms of getting services built on the site, and getting a contribution towards infrastructure costs using Section 106 agreements. These are agreements which commit the developer to building new roads, schools, etc. needed to meet the needs of the occupants of new housing. The result is that the majority of land provision for housebuilding in the UK excludes self-builders (although self-builders were still responsible for 15% of all new housing in 2010).
Landowners could be given tax incentives to put in the roads, sewers and other mains services necessary to allow large sites to be sold off as individual sites. Servicing the sites would be a considerable investment up front which involves risk for the landowner.
However, once serviced the individual plots should be able to command a premium compared to what a national housebuilder would pay. Incentives could be in the form of advanced tax reliefs agains the cost of servicing the plots, or greater tax reliefs/allowances on the profit or gain made on the sale of single sites. This could also help form an alternative form of affordable housing provision.
Developers who already own large sites could be freed from having to build a proportion of affordable housing units, and instead be given an incentive to sell off a proportion of sites as serviced plots to self-builders. Some of these sites could be smaller plots for affordable self-build units.