Boot hits out over planning shake-up

THE new coalition Government's shake-up of the planning system is a "retrograde step" which threatens to further slow the rate of housebuilding, construction group Henry Boot warned.

The Government recently scrapped centrally imposed housebuilding targets, giving councils discretion on planning and the amount of land to be allocated for housing.

The Sheffield-based firm, which promotes land for housing through the planning process before selling it to housebuilders, argued the changes are likely to mean a slowdown in rates of planning permission for new houses.

Sign up to our Business newsletter

Sign up to our Business newsletter

"It's an incredibly bad and retrograde step," said finance director John Sutcliffe. "We had a plan that worked from national level right down to local authority level. Planning authorities kind of knew where they were.

"It effectively has been cast asunder down to the local planning officer so he's got no idea of the context. It's just going to grind to a halt."

The group added this could stifle the industry's ability to meet the country's long-term housing needs. The Home Builders Federation estimates that at the current rate of about 100,000 new homes a year, Britain is building at its lowest rate since 1923. It has called for clarity on the changes.

Despite this uncertainty, "we are confident that our land bank should produce a good supply of sites for disposal", Henry Boot added. It has submitted planning applications for sites including Edinburgh, Sheffield, Exeter, Bedford, and Stratford and has interest in 8,126 acres.

The Government argues planning changes will reduce "unaccountable regional bureaucracy", and plans to incentivise councils that support construction.

Henry Boot yesterday returned to the black with pre-tax profits of 9m in the first six months, compared with a 20.3m loss a year earlier. Sales dipped to 55m from 67m a year ago, but the group saw its property portfolio increase by 1.7m in value, compared with last year's 23.6m deficit.

"We're in a pretty flat market," said Mr Sutcliffe. "There are some pretty serious concerns about spending, the planning rate and bank financing. But we're doing okay.

"It's nowhere near as good as it was two to three years ago, but nowhere near as bad as it was (at the depth of the recession)."

He said the private sector is starting to pick up "a little bit" as vendors and companies are more realistic about development. It is about to start work on a 25,000 sq ft Waitrose supermarket in Warminster, its first new development for about two and half years.

In York, its 18,000 sq ft former nightclub at Clifton Moor has won planning consent for a retail warehouse, which has received some occupier interest. Planning negotiations for its final 16 acres at Priory Park in west Hull has progressed well, with permission expected soon, it added.

Henry Boot proposed an increased dividend of 1.35p a share, compared with 1.25p a year earlier.