Stealth’ housing taxes could destroy Shropshire’s construction sector
Stealth housing taxes recently introduced in Shropshire could destroy the county’s property market a local architect warned today.
Vic Johnson, Managing Director of boutique architects practice Johnson Design Ltd, believes Shropshire County Council’s insistence on imposing Section 106 and the Community Infrastructure Levy (CIL) has the potential to ‘kill’ construction projects currently going through the planning stages.
These anti-residential development policies fly in the face of the recent Government announcement to ‘Get Britain Building’ and could threaten hundreds of construction jobs and put many architects out of business.
The two measures, which are not widely imposed by local authorities in the UK, could increase development debt, on average, from £200 to nearly £18,760.
“We work all over the country, but never have I seen so many costs forced on developers than in Shropshire…it really is killing the sector,” explained Vic.
“If a developer is looking to build four small houses it would be forced to pay a Section 106 cost of £38,000 and a further Community Infrastructure Levy of £13,000.”
He continued: “That’s £51,000 and does not including all construction costs, finance on land, interest payments, utilities payments and cost of selling.
“The fear is architects will not design, builders will not build, apprentices will never learn or be employed and young couples will never move in. Ultimately, planners will also stop planning!”
Johnson Design, which is celebrating its tenth birthday this year, is involved in considerable residential work in Shropshire.
The company is currently witnessing the impact of Section 106 and the Community Infrastructure Levy first hand through a project to build a two-bed bungalow on a piece of land in Spout Lane, Broseley.
The couple behind the new build are Mr and Mrs Millinson, who are looking to move into the new property and sell their existing bungalow just a few meters away to free up cash for their retirement and future care.
Unfortunately planning consent from Shropshire County Council bought with it more than £13,000 in charges through Section 106 and CIL, bringing the project to a standstill.
Malcolm Millinson, who used to run his own scrap merchant business, picked up the story:
“We are both in our mid 70s and the chance came to buy a piece of land next to our 3-bed property so we could downsize to a smaller bungalow and make some money by selling our existing home.”
He continued: “I found a buyer quickly and set about working with JDP on the planning and the design then all of a sudden got hit by a massive bill just days after applying for planning.
“Nobody knows much about these stealth housing taxes, but they are seriously going to delay my project. All we are looking to do is to generate some savings for later in life, yet we are already going to be £13,000 down before we’ve even started.
“We are seven weeks down the line of an Appeal and hope for a favourable outcome so we can start on the build.”
Johnson Design Partnership offers a complete project management service from feasibility work and planning to detail design, project monitoring and contract administration.
In addition to its residential work, it also boasts a proven track record in healthcare, commercial and industrial, education, retail and landmark infrastructure projects.
The company is determined to raise awareness of ‘stealth’ housing taxes and has already held a positive meeting with Ludlow MP Philip Dunne to raise the concerns of the sector.
