Planning gain ‘holidays’ could stimulate stalled building projects, says property lawyer

Rodney Whyte
Rodney Whyte

A property lawyer has called on local authorities to offer ‘planning gain holidays’ to revive stalled commercial and housing developments.

Rodney Whyte, a partner in Pinsent Masons in Aberdeen, said planning chiefs could revive developments which have been put on ice by relaxing rules on the planning gain contributions builders sign up to.

It has been accepted practice that to obtain planning approval on housing, and to a lesser extent commercial development projects, that developers must agree to provide Planning Gain.

These Developer’s Contributions, as they are also known, could be in the form of funding facilities at a local school, supporting a community initiative or paying for associated local infrastructure.

Real estate expert Rodney Whyte said: “The appointment last week of Henry Boot Developments to build the new £333 million Aberdeen Exhibition Centre is a welcome step forward, while the AWPR project continues apace and the £410 million Aberdeen Harbour extension (both of which Pinsent Masons acted on) are all superb platforms for growth and will aid diversification of the North East economy.

“However, the local construction and development industry continues to face significant challenges. Workflow is patchy, construction costs continue to rise and margins are under pressure.”

Whyte called on local authorities in Aberdeen City and Aberdeenshire to review how they are handling current planning applications and to play their part in boosting the local economy.

He added: “A sensible initiative would be for planning departments to take a fresh approach to residential and commercial developments which are in the pipeline. In this period of localised ‘market failure’ they have a crucial role to play in championing bold and innovate ways of making sure new planning applications have the best possible chance of viability and success.

“Planning officials should revisit existing ‘planning gain’ packages which have been previously negotiated, but which post oil-price slump and post-Brexit vote, may have caused developers to think again and to ‘put on ice’ certain projects.

“Planning gain may be a laudable and well accepted practice when markets are in a position to deliver a development that can meet these contributions, but if they become a burden which makes a development unsustainable, then no party gains.

“It could be that ‘planning gain holidays’ need to be introduced to encourage developments to proceed, but which also protect a council’s position and contain suitable clawback arrangements if and when there is a return to ‘normal’ market conditions.”

Increased council tax or rates revenue, job creation and promoting the North East as a vibrant and diverse place to live and work, would be just some of the benefits of such an approach, claimed Whyte.

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