Persimmon Share News (PSN)

Tue, 7th Jun 2011 17:49

By Lorraine Turner

LONDON, June 7 (Reuters) - Britain plans to sell public land worth an estimated 10 billion pounds ($16.35 billion) to address a chronic housing shortage and help erode its record budget deficit.

All government departments with significant landbanks will be asked to identify, by the autumn, land suitable for sale for homes, Housing Minister Grant Shapps will say on Wednesday.

This will be used to build 100,000 homes over the next three to four years, in a scheme that is expected to support as many as 25,000 jobs.

The 10 billion pounds estimate of surplus land is based on government figures for land values in England from HM Treasury in 2005, supplied by the Town and Country Planning Association (TCPA).

'As one of the country's biggest landlords, the government has a critical role to play in making sites available for developers so we can get the homes this country needs built,' Shapps will say in a statement.

'Over the coming months, property specialists will work to make sure no stone is left unturned and no site is left unused, and every department's plans will come under the close scrutiny of a cabinet committee.'

Some of the land will be sold under a 'Build Now, Buy Later' deal, and the names of the first three sites -- to be made available immediately to developers -- will be announced on Wednesday.

'It will be a boost in the arm for housebuilders,' said a spokesman at the Home Builders Federation, a 300-member trade association which represents builders such as Persimmon, Barratt Developments and Taylor Wimpey

'We only built 100,000 homes last year and, if implemented practically, this could mean an extra 30,000 homes a year, which is clearly a significant increase.'

The HBF estimates a shortage approaching 1 million homes in England, and forecasts 232,000 homes need to be built per year to close the gap.



CHRONIC SHORTAGE

Britain's housing market has been slowing since the middle of last year and recent data show mortgage approvals fell in April to just half their long-run average, before the financial crisis, of 90,000 per month.

Last week it emerged housebuilders are in talks with British banks to find ways of helping buyers overcome tight lending conditions, which have caused market gridlock.

Housing organisations are concerned the land may not be sold at subsidised levels, leaving few incentives for developers to build affordable housing, of which there is a chronic shortage.

'With the Treasury under pressure to generate high sales receipts, decisions as to what kind of development takes place and where could be driven simply by the highest bidder,' said Hugh Ellis, Chief Planner at the TCPA.

'The private sector could be left having to squeeze every penny out of development.'

(Editing by David Hulmes) Keywords: PUBLIC LAND HOUSING/

(lorraine.turner@thomsonreuters.com; +44 20 7542 9597; Reuters Messaging: lorraine.turner.thomsonreuters.com@reuters.net)

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