HCA considers pay later deals for all southern land
Builders will be offered build now, pay later deals on all public land disposed of by the Homes and Communities Agency across large parts of southern England.
Terry Fuller, the executive director responsible for the east and south east, has said he wants to use the model for all land in his area to maximise the number of properties that can be built.
Under build now, pay later, developers are given land at no up-front cost to reduce the financial risk of projects. They would then normally pay for the land once the homes are completed, although terms will vary between sites.
The HCA is working with government departments to release enough land for 100,000 new homes by 2015.
Speaking at a seminar this week organised by East 7, a group of developing housing associations based in the east of England, Mr Fuller said the amount of money builders have to spend on developing homes has halved in the four years since he joined the HCA from Taylor Wimpey.
‘They don’t have enough money to buy all the land they want,’ he said. ‘This is a mechanism to stretch their finances a lot further. I’m not so much hung up on disposal of land as delivery of homes.’
He also said he was keen to explore equity share on all the sites under his control as a way to get more homes built, and improve affordability for buyers struggling to get mortgages.
‘Most of these sites probably haven’t been developed for a reason,’ he said. ‘HCA will work with you to ensure these sites are delivered.’
A spokesperson for the HCA said the agency would not be offering build now, pay later as an option on all sites across England. ‘We will support the deferred receipts model where it is good value for money,’ he said. ‘For some places it isn’t going to work, but it is one of the preferred models.’