Do developers want to build in zones 5 and 6?

Many developers perceive London’s outer zones as a sort of no-man’s land for homebuyers, according to one development finance lender.

The comments have come following a report which claimed that London boroughs in zones 5 and 6 were projected to build just 17% of the homes needed in 2017.

Business group London First believed that – according to the government’s new methodology – 19,000 new homes a year were required in zones 5 and 6.

Why aren’t these homes being built?

Tim Jackson, co-founder and commercial director at SAS Investments, felt that zones 5 and 6 were typically made up of historic villages that had been absorbed into Greater London over the past 50 years.

“They generally each have their own distinctive character and a well-engaged, vociferous local population with strong opinions on what they see as over-development and the potential added strain on local transport, parking and school places.

“Very rarely do these ad-hoc residents’ associations welcome new developments and local councils are loath to lose votes by green-lighting controversial developments.

“Unlike some parts of inner London – which are growing exponentially, such as Stratford in the east or Nine Elms to the west – zones 5 and 6 tend to have older populations with a more conservative view on change.”

Do housebuilders and developers want to build in zones 5 and 6?

Alexander Moss, operations manager at Zorin Finance, added: “Many developers perceive zones 4 and 5 to be a sort of no-man’s land for buyers, as young professionals want to be more central to London, and families will more likely relocate further out to commuter towns.”

However, Steve Larkin, director of development finance at LendInvest, said: “The price of residual land in these outer London locations is rising as the availability of land within zones 1-4 diminishes, thus the marketability of this land becomes ever more attractive to developers.

“The knock-on implication of this is that houses and flat prices in these locations rise to combat the additional residual upfront land cost.

“Given that there should be more land available to build more homes, we may see local planning authorities looking to enhance the affordable housing numbers.

“This would then have a knock-on impact on residual land values.”


“The government needs to take further steps towards permitting the SME housebuilders which will play a vital part in delivering the target for housing in zones 5 and 6,” said Katy Katani of Zorin Finance.

“Otherwise, the gap between what is built and needed will remain significantly high.”

Rico Wojtulewicz, policy adviser for the National Federation of Builders, added: “Planning must be simplified with small sites and infill encouraged and identified as part of local plans.

“The only way London will meaningfully increase the supply of new homes is by accepting development and enabling the entire market to build, not just those with the deepest pockets.”

Katy also wanted to see an expansion of London’s transport system, which would unravel more housing development in outer zones.

“This will facilitate the pace of housebuilding.

“Green belt sites near transport infrastructure should be reviewed by the local authorities.

“The councils need to identify land which could be used for development by removing certain planning restrictions and partnering with developers in order to build new homes.”

Tim felt that new developments built in outer zones were generally rare and exclusive, which made them attractive to small developers.

Tim added: “The only way to increase the supply in these areas would be to take the decision making on planning out of the hands of local politicians and into independent local housing-delivery bodies or by fining local authorities that fail to meet their share of the national target for new homes.”

Meanwhile, Steve added: “If the availability of land is there to build new homes for first-time buyers, young families and those looking to get on the property ladder, we should look to make this an easier process for developers who want to make these schemes work.

“This can be achieved by increasing the availability of finance from lenders who are keen to support this market.”

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