New Homes Team
Whilst housing was established as a key priority by the government in 2016, the shortage of good housing continues to dominate our headlines. House completions in 2016 were somewhere between 14,000 and 15,000, a welcome increase on the 12,666 houses completed in 2015. However, it is less than 50% of some of the estimates for the natural demand for housing. I head up the New Homes Team at Keating Connolly Sellors and we have made it our business to examine factors contributing to the short supply and the challenging conditions commercial property developers face within the property market. We see it as part of our responsibility to encourage new developers into the market, bring value and constructively ease impediments to the development process.
Commercial property developers continue to have difficulties in securing funding, therefore being in a position to be able to access a range of funding options is critical to development. The emergence of new funds and institutions that provide all or part of the non-equity funding i.e. non-bank lenders, are becoming a real and viable alternative to the mainstream banks. Non-bank lenders comprise insurance companies, private equity investors, pension funds and debt funds. This type of capital can be more flexible which is invariably reflected in the cost, but can have a more commercial view than traditional banks.
At Sellors, we work with a number of non-bank lenders and have secured successful investment from these entities for a number of our developer clients.
A lack of suitable land is another major obstacle to development. We have seen a slow drip of development property come back into the market from the sale of a number of substantial loan funds. However, much of this land is being sold without planning permission, which means its acquisition is difficult to fund, unless there is a cash buyer. Under the Urban Regeneration and Housing Act 2015, local authorities are obliged to compile a register of lands in its area that are suitable for housing, but not coming forward for development. These lands are potentially liable to an annual tax at the rate of up to 3% of the market value until developed, which stimulate an increased supply of developable property.
Traditionally, navigating the planning process in Ireland has been timely and expensive. A key measure launched to make the planning process more efficient is The Planning and Development (Housing) and Residential Tenancies Bill which, when enacted, will create a new concept of Strategic Housing Development and provide a direct route for the determination of planning applications through a new division of An Bord Pleanala. This is aimed at expediting the planning process for new homes, but only for larger developments of strategic importance from an average of 84 weeks to 25 weeks. Applications for planning permission for smaller developments will operate under the existing planning timelines and process. The New Homes Team have a successful record in dealing Local Authorities and An Bord Pleanala on behalf of clients and in devising schemes of development for clients, which help overcome planning obstacles and, ultimately, lead to the onward sale of completed units.
Contact Miriam O’Connor, Commercial Property Partner and Head of the New Homes Team at Keating Connolly Sellors, for expert advice at [email protected] or call 061 432 309.
The material contained in this article is for general information purposes only and does not constitute legal or other professional advice. We advise people to always seek specific expert advice for their individual circumstances.