Firm hits out at red tape risk in planning Criticism of process said to be holding back property bids
A Perth-based house builder has hit out at “bureaucracy” in the planning system which it believes is hindering the property market.
In a strategic report accompanying A&J Stephen (Holdings) Ltd’s latest accounts company secretary John Webster also says having to make financial contributions to Perth and Kinross Council as part of planning consents is eating into the group’s profits.
Accounts filed with Companies House show the group’s profits before tax fell from £2.31m in 2016 to £209,563 in 2017 while turnover dropped from £24.92m to £17.47m over the same period.
In a review of the business in his report for year ending March 31, 2017, Mr Webster explains: “Difficult trading conditions in the north-east of Scotland following the crash in the price of crude oil along with general uncertainty over the economic position following Brexit have both negatively impacted sales.
“This year 64 new homes were sold, a fall of 34 on the previous year.”
Looking forward to the year ahead, he continues: “We anticipate new home sales to be approximately 70. A number of our popular developments are close to being sold out, however, our new developments in Scone, Luncarty, Cupar and Newburgh have been delayed for various planning and technical reasons.
“We anticipate our new development at West Woodlands in Perth will be the first to come on stream in summer 2018.”
Mr Webster continued: “The group continues to invest in strategic land acquisitions and to capitalise on our expertise of promoting developments through the planning process.
“However, the time it now takes to bring a major application forward is hugely protracted. The extent of information requested by the planning process and the numerous statutory consultees is significantly impacting on the businesses ability to deliver new homes and provide ongoing employment opportunities.”
Under the heading ‘Principal risks and uncertainties’ Mr Webster went on: “Planning gain continues to be a significant cost to the business with 25% of new housing being affordable.
“Within Perth and Kinross we now also pay an education levy of £6395 per house along with a transportation levy of £3549.
“These measures are entirely outwith our control but significantly erode profitability.”
And he adds: “The house building industry is subject to an increasingly stringent regulatory environment and levels of bureaucracy.
“The industry body Homes For Scotland have recognised this and believe it to be a significant factor constraining the delivery of new homes across the country.
“Within the Stephen group we have a number of new sites tied up in the approval process.
“Further delays to these projects would inevitably affect the future performance of the group.” Perth and Kinross Council headquarters