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Cala boss wants change

Ministers ‘will miss homes target without reform’

Alan Brown Cala

Brown: government risks missing target


Cala Homes chief executive Alan Brown has again called for a reform of the planning rules to enable the industry to meet demand for new homes.

Mr Brown said that delays caused by the planning system would hold up the Westminster government’s target of building a million homes by 2020.

“If the UK is to stand any hope of delivering on this aim, urgent reform of the planning system is required to remove the obstructions that are preventing us and other developers from getting on and building the homes the country desperately needs,” he said

His comments came in a trading update stating that Cala expects a fifth consecutive year of record profits.

It is also likely to exceed £700 million in revenue for the first time and substantially higher than last year.

Speaking later to Daily Business he said Scotland’s planning regime was much more benign than in the England and that local authorities “take their housing needs more seriously”. The company is due to build in Leith and Gullane in East Lothian.

He said he would welcome any move by the Finance Secretary Derek Mackay to raise the thresholds on land and buildings transaction tax. “It would be absolutely the right thing to do,” he said, noting that “no one is moving” at the higher end of the market because of the levels of tax being levied.

He said the company was targeting £1 billion in turnover and that its eight businesses are “growing at speed”.

In his statement Mr Brown said: “2017 has been another record year for the group.  Our performance for the twelve months to the end of June will see us deliver revenue in excess of £700m for the first time which is a big step towards our stated aim of delivering an annual capacity of up to 2,500 units and £1 billion of revenue by 2020.

“We enter the new financial year in a positive position with a strong level of forward private reservations that is actually ahead of our expectations.  We continue to see good opportunities to buy high quality land in attractive locations at affordable prices and I remain confident in both our near term and longer term growth plans.”  

Highlights

  • Strong trading performance expected to result in a fifth consecutive year of record profits
  • Group on track to deliver its strategic growth plan with annual revenue exceeding £700m for the first time (2016: £587.1m)
  • Total home completions up 46% to 1,677 (2016: 1,151)
  • Private ASP £497,000 (2016: £538,000) driven by a change in site mix and continued transition away from the market for homes over £1m
  • 34 new sites (3,199 plots) contracted during the year with a potential gross development value (“GDV”) of £1.3bn
  • Planning permission granted on 33 sites (3,156 plots) with a potential GDV of £1.2bn
  • Private revenue per site per week up 6% to £271,000 (2016: £254,000) with private sales per site per week of 0.56 (2016: 0.48)
  • Strong level of forward private reservations (+26%) provides the Group with good visibility as it heads into the new financial year
  • CALA calls on the Government to urgently reform the UK planning system in order to achieve the Conservative’s manifesto pledge to build one million new homes by 2020

SPF says Scots reform ‘promising’

Scottish Property Federation Director, David Melhuish, last week offered a “cautious welcome” to the Scottish Government’s planning review. 

H said it contained some promising suggestions on streamlining and simplifying the plan-led system, including the use of simplified planning zones, bolstering the National Planning Framework and Scottish Planning Policy. 

“However, we continue to hold major reservations over the prospect of a Scottish Infrastructure Levy and further discretionary fees on the back of a six-fold increase in the planning fees cap in Scotland.

“Any increase in fees paid by the private sector needs to result directly in an injection of additional resources for planning services, delivering stronger leadership that supports appropriate development and encourages new investment in our built environment.

“Unfortunately, we have yet to see full commitment by planning authorities to tie fees to better outcomes in the way that’s needed. Moreover, while infrastructure delivery is a key challenge under the current system, its reform will be a key test of success for the proposals in the consultation paper, bearing in mind the experience of members with the Community Infrastructure Levy in England. 

“We want to see a greater understanding by the public sector of the upfront costs the private sector already pays towards delivering the planning service and the risks involved. If we are to drive local economic growth, jobs and investment we must have strong public leadership and an efficient, aspirational and delivery-focused planning service.”

 

 

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