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16 February 2009
I hope you enjoyed part one on this post below. Let me start part two by saying that financial viability is the biggest problem for private developers at present. Unless projects are financially feasible the private sector will simply not invest. Financial assistance from the public sector is particularly important at this time in supporting the viability of projects. Public funds can be safeguarded and through flexible arrangements financial support could reduce as the recovery occurs and ‘claw-back’ provided as markets improve and financial viability is restored.
The current difficulty is we don’t know how long the recession may last. I expect it’s going to with us for a year or two and when the recovery does occur it is likely to be more gradual than the sharp upturn we have seen after previous recessions. It is therefore important that we find ways and means of keeping the regeneration programme going be it at a slower pace than would have been expected in more buoyant times.
On the issue of sustainability there is a set back, due to the recession, in the amount of research and development that is being undertaken to reduce the environmental impact of buildings, in particular of material and component parts. Indeed, this is an area where more Government funding will be needed in the short-term to maintain research, as the cost of delivering the Government’s Code for Sustainable Homes is not economically viable at present. For the sake of our customers we must also ensure that the innovative materials and technologies that are required to satisfy the Code are reliable in the long-term.
The development industry faces a highly complex challenge of balancing the need for sustainable homes, buildings and places, whilst producing more new homes in response to the Government’s highly ambitious targets, particularly for affordable housing.
What we must hope is that the recession does not last too long and that the regeneration of our towns and cities can be progressed in a sustainable way.
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Information correct as at 16/02/2009