The UK property market is facing multiple challenges. Higher interest rates are affecting valuations and proposed projects, while with more people working from home after the pandemic companies must decide how much and what type of office space to occupy.
Climate change and the desire to reduce carbon are also having an impact, but inflation and evolving policy are making it more challenging to meet environmental targets and aspirations. Meanwhile, when developers seek public money to support innovative projects, funders are asking them for data with respect to demand or economic benefits that can be difficult to secure.
Property is imperfect and often public sector funders require evidence that can be challenging to secure. For instance, one question that often arises is 'What the price premium will be if the specification of the project is increased?' Where there aren't yet local examples, this data simply doesn't exist.
There is a need for organisations – including policymakers – to be brave enough to invest and then monitor to secure the evidence that will benefit future schemes – securing this data is to the benefit of the economy and society.
As a specialist real-estate development consultancy working for public- and private-sector clients across the UK, at AspinallVerdi we have found that our services can be in demand despite a weak property market. In fact, we are often brought in at times of market failure.
Ongoing central and local government policy-making generates many of our instructions; for instance, we help local planning authorities across the country to put their local plans in place by assessing their viability and carrying out employment land studies. In the private sector, meanwhile, we are often engaged to help secure public-sector support.
This work gives us particular insights into the current situation – and especially how this is affecting SMEs in the land sector.
The economic and political outlook is going to mean continuing uncertainty for our sector, particularly with an impending general election. Policy-making and spending are likely to be motivated by political self-interest rather than an effort to lead.
In local government, resourcing is one of the biggest challenges. Staff and expertise are in high demand but limited in supply. In particular, planners are being given a poor profile by the press and politicians.
If we want a quality environment, we need to consider the role that the planning profession has. Often seen as a barrier to overcome, planning should instead be regarded as helping steer the market, ensuring the best outcome for everyone.
Meanwhile, although the government has made much of localism and levelling up, it is still setting centralised planning policies that can have unintended consequences in specific local circumstances.
Local authorities should be empowered to make their own decisions. For instance, the use of permitted development rights has to suit the locality and councils will be the best judge of this. For example, towns with strong residential markets are losing employment space around outer London and the South East. At a regional level, long-term strategic planning is also essential for the economy to thrive.
The financial position of all local authorities varies. Some are facing enormous challenges. When they have applied for central government grants – such as the Future High Streets Fund, Towns Fund and Levelling Up Fund – they have also been subject to successive bidding rounds to compete for finite public sector funding.
While as a practice we and our clients have enjoyed success in this endeavour, applying for those grants has been time-consuming. For those that were not successful or obtained less than the amount they sought, it can be disheartening as well as costly.
Where local authority resources are already stretched, committing teams and budgets to these bids represents a significant risk. If you are lucky enough to be successful, the challenge is then meeting central government deadlines to deploy the funding.
Together with our clients, we are continually dealing with new developments and local policy-making on important issues linked to climate change.
These include the recent uplifts in Parts L and O of the Building Regulations, on conserving fuel and power and overheating respectively, the much-discussed Future Homes Standard – which had proposed to end gas boilers in new homes although no longer does so – biodiversity net gain (BNG), nutrient neutrality and carbon reduction.
The challenge is to develop practical ways of dealing with these while maintaining the viability of development. This will require both deft policy-making and innovation in design and construction methods.
RICS can be a leader in this field through research and its membership to make sense of the costs and values of dealing with climate change and then benchmarking them. It could take a collective view about the impact of standards. Equally, it has access to policymakers and is at the forefront of dialogue with government.
Close-up of innovative development Sky-House Waverley near Sheffield. Images: Will Roberts, Vox Multimedia
To be effective, policy needs to be developed alongside the necessary funding. It is all very well to set policy targets, but unless it is carefully designed and clearly articulated in terms of exactly which technologies or interventions are required, planners or developers have little idea how to meet those targets. Greater certainty and leadership is required.
Politicians have been trying to improve land value capture through the development of the infrastructure levy. Recent changes in policy on BNG and nutrient neutrality may have short-term political gain, but leave these important issues unresolved, especially at the local level. However, with sites varying in terms of characteristics and value, a uniform approach does not work.
RICS and the development sector need to do more to encourage young people into the profession.
The increasingly popular route of apprenticeships presents an excellent opportunity for employers and candidates. Indeed, this is how I started as a trainee valuer more than 30 years ago.
The sector can offer interesting and rewarding careers. The skills that we are looking for are problem-solving, curiosity, analysis and communication. Much of our work is advocacy, whether verbal or written, and the ability to deal with other people is critical. We do crunch a lot of numbers, so numeracy as well as IT skills are essential.
AspinallVerdi's status as an RICS-regulated firm is important to us and our clients. We often discuss public interest, and our work with communities and the public sector means that this complements our purpose and ethos.
Recent changes resulting from RICS' Member Engagement, Experience and Value working group, on which I sat, have resulted in some positive changes, including provision of CPD and more transparency in terms of expenditure.
Also, we have an RICS SME account manager who has been excellent at setting up a corporate account and on-boarding our APC candidates. This saves us a lot of time and helps us avoid a lot of the frustrations of the past.
We're committed to RICS, and want to play our part in furthering its thought leadership role and engagement with policymakers. A lot of the work we do is the result of political decisions – and with the long view that our business can offer, we can bring plenty of lessons to the table.