2019: The year in review
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With the impending divorce of Brexit, will developers want to continue ‘to have and to hold’ their land, asks Croftons’ Property Partner, Julie Loggenberg.
The fact that developers and house builders took a huge hit on their share prices after the UK voted in favour of leaving the EU last week will no doubt focus attention on many sites which are either just starting or in the pipeline. Developers will not build what they cannot sell.
Back in 2007/8 we saw them just simply down tools and walk off sites. Will this be the pattern post the Brexit vote and where will this leave RPs under contract?
No doubt the temptation by developers in contract with RPs will be to look to finish off units as quickly as possible as the return is certain and the price fixed. But will you be left with an island of properties set in a sea of uncertainty? Lessons were learned in 2007 and contracts were tightened up, to try and off-set the effects of abandoned sites with no obligations to provide infrastructure, but are we sure that the noose has not been slackened?
Bringing affordable housing programmes forward will undoubtedly be on every developer’s radar, but how would this impact on your cash flows? Do your contracts offer protection and could you renegotiate better terms? Delivery via S106 sites may also stall as developers will simply be looking to renegotiate terms or let planning permissions lapse as viability reports will be waived in the faces of local authorities throughout the county.
But could this be an opportunity to negotiate a better deal? If the residential market were to downturn then the opportunity is surely there to take up the slack at a much reduced price. Perhaps dusting off those contracts would not be a bad thing?
If you would like to speak to Croftons about any of these issues please contact Julie Loggenberg.
Croftons is the trading name of Croftons Solicitors LLP, a limited liability partnership registered in England and Wales with number OC343375. The term ‘partner’, if used, denotes a member of Croftons Solicitors LLP or a senior solicitor of Croftons Solicitors LLP with equivalent standing and qualifications. A full list of members is open to inspection at the office. Croftons is authorised and regulated by The Solicitors Regulation Authority (SRA) number 508041. Croftons has its principal place of business at The Lexicon, Mount Street, Manchester, M2 5FA.