New hope for construction industry
WITH the news that the Government have finally decided to change the planning restrictions as promised in the last budget, making building a priority to help boost the economy, VAT and construction expert Rob Case, from Randall and Payne, weighs up the pros and cons.
"Although the relaxation of planning rules on extensions for home owners may seem like a great way to increase the level of small building projects around Gloucestershire, some leading SME builders are still finding it hard to get clients to commit to extensions as a result of the amount of VAT payable on the job. On average, a householder commissioning an extension with an area of 15 square metres (average three metre permitted development extension distance), could expect to pay approximately £3000 VAT on top of the building costs.
On the up side, the new Permitted Development Rights should make it easier to install conservatories and loft extensions without going through weeks of planning bureaucracy, which will be good news for our local window companies. Communities Secretary Eric Pickles said on the BBC that the extension rule changes would benefit local businesses as well as householders, as the new carpets and furnishings needed for the new extensions may also help our damaged retail sector.
The same relaxation to business premises may actually help growing companies finding it hard to fund new buildings expand existing property further. Where the space is available, businesses could be able to expand shops by 100 square metres and industrial units by 200 square metres, which may help some of our clients.
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The biggest change to the rules, which may really drive new developments around Gloucestershire, is the removal of requirements for developers to include affordable housing if they can prove it would make a site "commercially unviable", which has halted developers in the past. The Government calculated that 20,200 new homes a year are required in the South West to meet housing needs, including 6,000-10,000 affordable homes for people who cannot afford to buy or rent on the open market and they have promised 150,000 additional affordable homes throughout England during 2011 to 2015, which may run aground in the face of the relaxation in affordable housing requirements.
A key issue our construction clients face still remains when trying to obtain finance for their projects, but one thing is clear, with the promise of £40bn in Government guarantees to underwrite major infrastructure projects and £10bn to underwrite the construction of new homes, the Government is banking on this to kickstart the building sector which has been sluggish at best.
â If you're in the construction industry and wish to find out how these changes may affect your business, contact Rob Case on 01452 723377.