Construction Loans News:– New rules on the way housing developers pay for infrastructure are to be brought in, the Government confirmed this week.
Builders already have to pay for roads, schools, GP surgeries and parkland that is needed so that areas can cope with the influx of extra residents.
Regulations were laid in parliament this week, aimed at making it easier for councils to introduce the community infrastructure levy.
Housing minister Kit Malthouse said the Government would simplify the current rules so local communities would know exactly how much developers were paying for infrastructure.
Councils will be required to report the deals done with developers, and set out how the money will be spent enabling residents to see every step taken to secure their area is ready for new housing.
The Government said the changes would help developers start on projects quicker thereby helping deliver 300,000 new homes a year by the mid 2020s.
Housing minister, Kit Malthouse MP, said: “Communities deserve to know whether their council is fighting their corner with developers – getting more cash to local services so they can cope with the new homes built.
“The reforms not only ensure developers and councils don’t shirk their responsibilities, allowing residents to hold them to account – but also free up councillors to fund bigger and more complicated projects over the line.”
Developers were charged £6 bn in contributions in 2016-17, helping to fund jobs and growth. However, councils have previously not had to report the total amount of funding received or how it’s spent.
Rules aimed at speeding up groundwork
The Government said the new rules would enable councils to introduce the levy faster so that areas could benefit from getting the infrastructure needed in good time.
Malthouse added restrictions would be eased to allow councils to fund single, larger infrastructure projects from cash received from multiple developments, giving more freedom to deliver complex projects at pace.
Construction Loans by HZA
Finance brokers Hank Zarihs Associates said if the new rules delivered larger schemes faster, then this would be a positive step. The company added this could help developers repay construction loans and property and refurbishment finance off more quickly.
Councils have faced problems collecting the levy in the past. Last month Bournemouth, Christchurch and Poole Council has said it would be willing to sue developers who don’t pay the levy.
A review of the council infrastructure levy was launched by the government in February 2017.