Building Boss Appeals To Prime Minister

The managing director of one of the East Midlands most successful building companies has written to Prime Minster Gordon Brown appealing for action to prevent a complete halt to house building in the region.

Karl Hick, head of Bourne (near Peterborough) based Larkfleet Group (www.larkfleetgroup.co.uk) which includes housing developer Larkfleet Homes, building contractor F E Peacock and timber frame specialist Kestrel Timber Frame, says it is not just the credit crunch and a slowing economy which are responsible for the present crisis in the house building industry.

In his letter he points to a rise in taxes and regulations which are making it impossible to build homes economically.

Specific problems which he draws attention to include:

For every home that they build, developers have to make payments to local authorities to finance roads, schools and other facilities.
As part of the governments plan to cut carbon emissions, new homes have to be built to increasingly tough standards standards which are adding thousands of pounds to the cost of homes and which will add more cost in future as new and even higher standards are introduced.
As part of most housing developments the developer or landowner has to provide 30 per cent or more of the homes as affordable housing homes which are normally passed to housing associations which rent or sell them at low cost to people who would otherwise not be able to afford to get onto the property ladder.

Larkfleet Group and its subsidiaries, including building contractor FE Peacock, are very committed to the affordable homes market. They build a large number of properties for housing associations. However, the company is concerned that this tax on development in the current difficult market will prevent many new developments taking place. It is particularly concerned about plans by some councils to demand even higher levels of affordable homes on new developments.

In his letter to Gordon Brown, Karl Hick says: These costs very often make sites very difficult to deliver in our area of operation, even in the good times, and this is before the raft of new legislation coming in.

In the current circumstances, he says, it is not possible for house builders to make a profit and they will go out of business as many have done in the past few weeks. The government will therefore fail to meet its target of getting 240,000 new homes built every year.

He suggests that the government must tackle the fall in house prices, get local authorities to review the costs they impose on developers to pay for schools and roads, and stop raising the standards required in building new homes.

Karl Hick is also expressing concern about recent changes to the way in which commercial rates are charged on buildings. He says this is making forward planning of developments very difficult and is having a profound effect on the development of local economies which will ultimately affect jobs.

His letter concludes: I am pleading with you to look at the commercial and practical issues surrounding the house building industry and the delivery of properties.

Any delivery programme cannot and will not happen unless local planning and government regulation is looked at and integrated together to examine the effects of both on the delivery programme. Major changes will be needed to ease the regulation burden."