It hopes that the sale will not only raise much needed revenue but also result in 100,000 new homes being built over the next four years, addressing the housing shortage and giving a much needed boost to the construction industry.
The amount of previously-developed land owned by the public sector is described as “more than twice the size of Leicester”.
By the autumn, every government department with significant landbanks will publish plans to release thousands of acres of previously-developed land to housebuilders.
To push progress, the cabinet’s public expenditure committee, chaired by Francis Maude, will analyse Property specialists from across government will work with each department, pushing them to release more land.
Ministers are also encouraging councils to follow the lead set by central government and make their unused land available for development.
Later this year, a new map will be launched to show land and buildings owned by public bodies in each area. A new Community Right to Reclaim Land has been introduced enabling residents to apply to organisations including central government departments and councils to bring their sites back into use - opening up the books so local people can see for themselves the assets held by central and local Government alike.
As part of the cross-departmental initiative, the Homes & Communities Agency has published its land disposal strategy, including a list of 'accelerated sites' that will be brought to the market over the next two years, allowing 3,000 homes to start on site by 2015.
This includes a Build Now, Pay Later deal, that offers to help housebuilders’ cashflow by making them only pay for the land once work has started on the new homes.
Publicly owned sites such as the following have been, and are being, made available for new housing developments across the country:
- Fairmile, Oxfordshire- A 40-hectare former hospital site owned by the Homes and Communities Agency, beside the river Thames in Cholsey, Oxfordshire. Fairmile is being transformed with the creation of 354 new homes including refurbished houses and apartments within the retained Grade II hospital buildings. There will be a mix of commercial, community and leisure facilities as well as landscaped grounds that will be made accessible to the public. The first new homes are due to be completed by developer Linden Homes this month and it is expected that the whole scheme will be complete by 2014. This will also serve as an early pilot for 'Build Now, Pay Later'.
- New Covent Garden Market- a 57 acre site, in Vauxhall, South London, will be redeveloped at no cost to tax payers to provide a new modern market, 2300 apartments, a hotel, shops, a major grocery store and community facilities including a food industry training suite. The market hosts 200 businesses with more than 2500 people employed on the site, the largest single employment site in Wandsworth. New Covent Garden Market is part of the Nine Elms Opportunity area which includes Battersea Power Station and the future home of the American Embassy. To provide additional transport links for the area, which when completed will include 16,000 homes including affordable housing, the developers are funding London Underground's Northern Line Extension. Covent Garden Market's redevelopment project includes the start of the new Green Linear park which will link the Nine Elms Opportunity area and provide additional outdoor and community space for Londoners and visitors; and
- Bath- The rationalisation of office accommodation owned by the Ministry of Defence will free up sites in Bath, which will be brought forward for disposal over the next few years. Subject to planning, the sites have the potential for around 1000 new homes. Bath and North East Somerset's Core Strategy is going to Enquiry in Public in September 2011 and it is anticipated that the Inspector's report is due in spring 2012.
Mr Shapps said: "As one of the country's biggest landlords, the Government has a critical role to play in making sites available for developers so we can get the homes this country needs built.
"So today, I can confirm an ambitious challenge across government to release enough land from Whitehall's grip for 100,000 new homes across the country. Over the coming months, property specialists will work to make sure no stone is left unturned and no site is left unused, and every department's plans will come under the close scrutiny of a cabinet committee.
"The work starts today, with sites already being brought forward by three different departments, including my own, some of which will be available on new terms so developers can start building straight away. So we are already off to a flying start - it is now for developers to come forward, make the most of this unique opportunity, and help contribute to our country-wide efforts to help get the homes this country needs built."
Chief secretary to Treasury Danny Alexander said: "This is a double dose of good news, creating and sustaining thousands of jobs by boosting housebuilders while also creating thousands of new homes for people to live in. Getting the economy growing is the government's top priority and this move, combined with other measures set out in the Plan for Growth to ease planning restrictions, are a key part of helping the private sector led recovery."
The announcement was being welcomed by the Federation of Master Builders, even though it believes the land sale is not enough to end the housing shortage. Mortgage finance and planning reform are also needed, it says.
FMB director of external affairs Brian Berry said: “It is pleasing to hear the government is being ‘ambitious’ about the total amount of land it will release. Even smaller pockets of land should not be overlooked as these would create a better opportunity for SME house builders to access the newly available sites. However, the government must also recognise that the financial crisis has severely restricted the availability of finance for developments and mortgages. In a recent survey of FMB members, 67% of those building homes stated that a lack of mortgage finance was preventing potential clients from buying from them, and 79% stated that the lack of mortgage finance was causing the business to slow the rate at which it builds homes. Even if house builders are offered a Build Now, Pay Later deal on newly released land they still need to be confident that clients will find the finance to buy from them.”
Mr Berry continued: “We know the government hopes to release enough land for 100,000 new homes, but its decision to allow councils to ignore regional spatial strategies has already resulted in plans for around 160,000 new homes being dropped. The Localism Bill changes the nature of the planning system quite dramatically, by removing these regional house building targets and devolving planning powers to local people. Like the government, we hope the Bill will encourage communities to see the benefits of development so that housing is delivered according to the needs of a local area. However, we have asked the House of Lords to ensure the Bill leaves no room for the deliberate misuse of powers by those seeking to obstruct development plans.”
Berry concluded: “We remain particularly concerned about the additional burden neighbourhoodplanning could place on already overstretched local planning authorities, and fear that the worst case scenario could see the plan led system grinding to a halt causing even more turmoil and delay for developers.”
Mark Clare, chief executive of housebuilder Barratt Developments, said: "This is a big step in the right direction. The rapid release of publicly owned land has the potential to be an effective catalyst for increasing the supply of land for new homes in this country during the next few years."
"Barratt has an established track record of working with public sector partners to build out important sites and deliver desperately needed new homes. We are already working on a number of Build Now Pay Later sites with the public sector and, in the wake of today's announcement, will be looking at ways to expand and deepen that partnership."
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